I am a new hire receiving a stipend. But I am being told that I won't get any HRA, traveling allowance, or any such exemptions on my stipend. Please let me know if a stipend can be divided into HRA, traveling allowance, or any other exemptions.
From United States, Simpsonville
From United States, Simpsonville
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Stipend is not a salary. HRA and allowances are given on salary. Mostly org. do not divided stipend. If we divide stipend then what will be the diff. between stipend and salary.
From India, Hyderabad
24From India, Hyderabad
I am paying income tax & PF on my stipend. If Stipend cannot be considered as salary, why is it taxed as salary?
From United States, Simpsonville
From United States, Simpsonville
Dear,
If the stipend is 50k per month, why will tax not be deducted? Tax is related to your yearly income. There should not be any deduction of PF on stipend. I feel that what you are receiving is a manipulated stipend.
Regards,
J. S. Malik
From India, Delhi
If the stipend is 50k per month, why will tax not be deducted? Tax is related to your yearly income. There should not be any deduction of PF on stipend. I feel that what you are receiving is a manipulated stipend.
Regards,
J. S. Malik
From India, Delhi
Generally, a stipend is paid to short-term trainees who are not employees (mostly summer or winter trainees). Employees on the company's payroll, including trainees, receive salaries with well-defined components. Are you an employee on the company's payroll or on a third-party payroll?
From India, Bhubaneswar
From India, Bhubaneswar
Dear Krutiks,
A stipend is a form of monetary payment for an internship or apprenticeship. A stipend does not have any bifurcations and is a lump sum payment. It may come to you with additional benefits that the organization may provide, such as food, accommodation, travel, etc. However, HR may not entertain your request to bifurcate it into components as is done for permanent full-time employees.
You mentioned you are on probation. So, I presume that post that, you will be confirmed (depending on your performance), and then you will have a salary structure just like other employees.
Regards
From India, Mumbai
A stipend is a form of monetary payment for an internship or apprenticeship. A stipend does not have any bifurcations and is a lump sum payment. It may come to you with additional benefits that the organization may provide, such as food, accommodation, travel, etc. However, HR may not entertain your request to bifurcate it into components as is done for permanent full-time employees.
You mentioned you are on probation. So, I presume that post that, you will be confirmed (depending on your performance), and then you will have a salary structure just like other employees.
Regards
From India, Mumbai
Stipend is all about maintaining your day to day need. It is not salary. Mostly stipend is too low to be taxed.
From India, Surat
From India, Surat
Dear Krutiks,
A stipend is a consolidated amount paid for the time and effort you put into the company during training. At this stage, you are not yet productive for them, which is why they are compensating you differently from other employees. Once you start working and become productive, they will adjust your pay accordingly.
Income Tax (IT) and Professional Tax (PT) can be deducted since income calculations are based on your yearly income rather than the mode of income. Provident Fund (PF) deductions may be happening because, as you mentioned being a direct hire currently on probation, they might be considering retaining you in the long term.
Please let me know if you need further clarification on any of these points.
Best regards,
[Your Name]
From India, Calcutta
A stipend is a consolidated amount paid for the time and effort you put into the company during training. At this stage, you are not yet productive for them, which is why they are compensating you differently from other employees. Once you start working and become productive, they will adjust your pay accordingly.
Income Tax (IT) and Professional Tax (PT) can be deducted since income calculations are based on your yearly income rather than the mode of income. Provident Fund (PF) deductions may be happening because, as you mentioned being a direct hire currently on probation, they might be considering retaining you in the long term.
Please let me know if you need further clarification on any of these points.
Best regards,
[Your Name]
From India, Calcutta
No, this can't be done. A stipend is basically given to the new joiner (with the concept to compensate him for traveling allowance, meals, or whatever you say) to sustain him/her on the job. During this period, he receives training and does not completely provide professional services. Once this period is over and after the assessment, management decides if he will be part of the team. Then, the HRA, conveyance allowance, LTA, etc., kick in.
From India, Delhi
From India, Delhi
Hello,
On this issue, we have consulted an EPF consultant who is working in the PF Department. According to him, PF is applicable to those employees, even if an employee works for just one day. However, earlier we consulted a Tax Consultant who mentioned that if an employee is in a training period and the company is paying them a stipend, EPF and PT are not applicable to them. This situation is a bit confusing.
Regards,
Suvarna Paranjpe
Pune
From India, Pune
On this issue, we have consulted an EPF consultant who is working in the PF Department. According to him, PF is applicable to those employees, even if an employee works for just one day. However, earlier we consulted a Tax Consultant who mentioned that if an employee is in a training period and the company is paying them a stipend, EPF and PT are not applicable to them. This situation is a bit confusing.
Regards,
Suvarna Paranjpe
Pune
From India, Pune
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