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  • Are interns supposed to pay taxes?

    Pensu

    Pensu

    @pensu-8tNeGU
    Updated: Oct 20, 2024
    Views: 1.1K
    Hi, I am doing an year long internship at a software company. Now they are asking my PAN card number for tax deduction. As I am not an Employee or "salaried personnel" and whatever I am getting is "stipend" not "salary", so why should I be paying tax? I searched a lot and couldn't find a definitive answer. Some says stipend is not liable to tax, some say it is. Anybody, with any concrete idea?

    P.S.: The annual amount of my stipend is over 3.5 lac.
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Replies

  • Sanyam Khurana

    Member • Jul 7, 2013

    I think above a minimum amount of 1 or 1.2 lpm, you are liable to pay tax whatever may the source of your income.

    I'm 99% sure, you have to pay tax.
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  • Pensu

    Member • Jul 7, 2013

    Ok, how about this:

    <a href="https://www.youthkiawaaz.com/2011/07/is-your-internship-stipend-taxable/" target="_blank" rel="nofollow noopener noreferrer">Is Your Internship Stipend Taxable? | Youth Ki Awaaz</a>

    I dont know how much credible this guy is, but whatever he is saying, makes sense.
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  • Kaustubh Katdare

    Administrator • Jul 8, 2013

    I'd rather contact a CA and get the answers. You never know what the rules are. I however think that you'd be liable to pay the taxes.
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  • Saandeep Sreerambatla

    Member • Jul 8, 2013

    What are you getting paid, salary or stipend that depends on how the employer is showing you.
    And any person who is earning money will have to pay taxes and file tax returns.

    let me ask you a few questions, if you are saying that if your stipend is over 3.5 laks per annum, are you getting the exact 3.5/12 per month?

    Or something like PF or something getting deducted?

    let me know these details and if you have to pay taxes there are many ways of proper investments or saving options which are valid. and can save a lot on taxes.
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  • Pensu

    Member • Jul 8, 2013

    Okay, so I talked to a lot of people including my HR and the result is I dont have to pay tax. 😀 As #-Link-Snipped-# said, my position to them is as an intern, so they are paying me stipend not salary. Moreover, if it was training then I would have to pay tax, coz there is a job guarantee at the end of the training. The only deduction here would be TDS (Tax Deduction On Source), which is apparently mandatory for every Employer and that's why they needed PAN card number. And yeah, as I am not an employee, so there is no PF or anything.
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  • Kaustubh Katdare

    Administrator • Jul 8, 2013

    Great! Thank you for the explanation. I'm sure it will help a lot of interns 😀
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  • Anand Tamariya

    Member • Jul 8, 2013

    Any person earning more than a stipulated amount per year is liable to pay income tax. FYI, TDS is income tax only.
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  • Saandeep Sreerambatla

    Member • Jul 8, 2013

    There are certain rules for stipend or scholarships. Its that if the amount paid is only for education then its not taxable but if they are paying for rent etc then itstaxble.
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  • Pensu

    Member • Jul 8, 2013

    Yeah, exactly if the stipend is being paid for the encouragement and not the service, it isnt taxable. Though I am not sure what exactly that means, but it sounds good! Same goes for the scholarships.
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  • Ashraf HZ

    Member • Jul 8, 2013

    Pensu
    Yeah, exactly if the stipend is being paid for the encouragement and not the service, it isnt taxable. Though I am not sure what exactly that means, but it sounds good! Same goes for the scholarships.
    I wonder if I can make the case to the tax officer that my salary is a form of encouragement too.. 😛
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  • Pensu

    Member • Jul 8, 2013

    ash
    I wonder if I can make the case to the tax officer that my salary is a form of encouragement too.. 😛
    Haha....I also thought of that....😉 I am sure they must have some rules to stop this kind of behavior. 😀
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