What is a Stipend?
A stipend refers to a fixed amount given periodically for services provided or to cover expenses. It is often offered to various individuals, such as students, apprentices, trainees, interns, and clergy members, as a form of payment. Stipends are commonly used to help offset specific costs and may be provided alongside or instead of a regular salary. They are typically given as a single payment and might include benefits such as accommodation, education assistance, and meals.
Geeky Takeaways:
- Stipends are fixed amounts offered periodically for services provided or to cover expenses, commonly given to distinct individuals.
- Stipends shall or shall not be taxable, depending on the context and purpose; stipends for educational purposes are often tax-exempt, while those for work-related training or experience are usually taxable.
- Recipients are responsible for setting aside a portion of their earnings for taxes if the stipend is taxable income.
- Stipends can be deposited directly into a bank account or paid in cash; recipients should ensure proper documentation to avoid issues with tax authorities.
Table of Content
- How do Stipends Work?
- Types of Stipends
- Real-World Examples of Stipends
- Who Qualifies to get a Stipend?
- Tax on Stipend
- Difference between Stipend and Salary
- Stipend – FAQs
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