TDS Deduction From Stipend.

Dear All:
Request you to help me in deciding wether we should deduct TDS from stipend payed to the trainee- who is pursuing the studies and came to our org for summer training/ project.
If no, what should be our explaination when it comes to account dept and audit people.
This si urgent.
Regards
Manasvi

In my opinion ,tds shouldn't be deducted. Reasons
1. Summer trainee's does not fall under employee-employer relationship.
2. The stipend, unless it is so high , will not cross the IT limit.
Regards
Team GroupHR
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Hi Manaswi,
It is highly unlikely that the trainees would come under the income tax slabs.
The very simple reason not to deduct TDS is - As the company is not paying enough (anually) that the employee comes under this category. hence, the company does not have the liability to file the TDS of this paticular trainee.
Regards,

But finanace people are telling that 11.33% needs to deducted from his stipent of Rs. 15K pm.
I would like to know what practice is being followed in your Co for such kind of cases.

TDS is related Income Tax Act so please take guidence from IT Dertt, you will get perfect guideline.