We have two college students interning with us for 6 months, and we pay them ₹10000 each every month. Do we need to deduct TDS on this? They don’t have any other income. What is the rule for interns?
Interns is a tricky matter, interns typically get practical training as part of the educational course. In that case, stipend paid does not constitute an employer employee relationship and such stipend maybe considered as scholarship which is exempt under income tax law. Knowing purpose is important. However, if the internship violates this purpose, it may constitute an employee or consultant relationship and TDS implication may arise.
Hope it clarifies.
CS Sharad Bhargava
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