We keep summer interns (2-6 months) who are pursuing their Masters and pay them stipend of between Rs. 2-10 K. Kindly suggest whether it is mandatory to deduct PF from the stipend. And if the PF is mandatory, is there any alternative way to keep interns and pay them without any statutory deductions.
Regards
Rehan
From India, Indore
Regards
Rehan
From India, Indore
Dear Rehan,
If you wanted to avoid any statutory obligation, then you may take him on internship with the proper interniship aggreement / contract with renewal period. mentioned his remuneration as service fees & dont process it from payroll, ask him to raise the invoice on his name every month & company can pay him by cheque as service fees, but only TDS will be attract, but, if there is nominal fees, he may take exemption for TDS deduction for fully or partially, you may take advise about the same from tax consultant.
From India, Mumbai
206If you wanted to avoid any statutory obligation, then you may take him on internship with the proper interniship aggreement / contract with renewal period. mentioned his remuneration as service fees & dont process it from payroll, ask him to raise the invoice on his name every month & company can pay him by cheque as service fees, but only TDS will be attract, but, if there is nominal fees, he may take exemption for TDS deduction for fully or partially, you may take advise about the same from tax consultant.
From India, Mumbai
Hello Rhan,
Yes you have to deduct the PF Amount from their basic head or you can ask them for Monthly bills and deduct TDS.
I will suggest you to deduct the PF Amount to give more benefit to Employees.
Regards,
Ashish
From India, Pune
Yes you have to deduct the PF Amount from their basic head or you can ask them for Monthly bills and deduct TDS.
I will suggest you to deduct the PF Amount to give more benefit to Employees.
Regards,
Ashish
From India, Pune
As per the Court judgements, the stipend is not wages and hence not covered by EPF Act. The trainees recruited under particular training scheme and no guarantee of employment after completion of training period. However, the trainees to be absorbed under regular rolls after the completion of training period are covered under EPF Act.
Pon
From India, Lucknow
Pon
From India, Lucknow
As far as TDS is concerned, if the earnings are more than the threshold limit of I.T. say 2 Lacs p.a., TDS will apply. However, the students who are getting stipend towards cost of education is not coming under the TDS.
Pon
From India, Lucknow
Pon
From India, Lucknow
Dear Mr.Rehan,
Hon. Mr.Pon has correctly replied. The Stipend is not falling under the definition of salary and that is why the TDS under salary will not be applicable.
The meaning of Stipend is 'VIDYAVETAN". This is provided to the bonafide students of Institute or College which are registered or affiliated as per AICTE Rules. This amount is usually paid as "Reimbursement of out of pocket expenses incurred by them while working on project" . The project work is part of their study and not commercial activity. Hence NO PF NO TDS deduction will be applicable
I had seen so many posts of Mr.Pon. High regards to him. Let us get his views.
Regards
Ramakant
From India, Pune
Hon. Mr.Pon has correctly replied. The Stipend is not falling under the definition of salary and that is why the TDS under salary will not be applicable.
The meaning of Stipend is 'VIDYAVETAN". This is provided to the bonafide students of Institute or College which are registered or affiliated as per AICTE Rules. This amount is usually paid as "Reimbursement of out of pocket expenses incurred by them while working on project" . The project work is part of their study and not commercial activity. Hence NO PF NO TDS deduction will be applicable
I had seen so many posts of Mr.Pon. High regards to him. Let us get his views.
Regards
Ramakant
From India, Pune
Dear ESI shall be applicable, as apprentices, in this particular case, are not under the Apprentice Act
From India
From India
Dear All, Yes I agree with Mr. PON. The Stipend is not the part of Salary/Wages under the definition of salary. regards N.s. Negi
From India, Mumbai
From India, Mumbai
Dear All Goodafternoon Give me vda letter of as per uttrakhand state. L.D.Patel P&HR-Head Vectus Industries Ltd.
From India, New Delhi
From India, New Delhi
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Rules for Statutory Deductions Exemptions Perquisites-Pay roll.doc