What is Stipend?

A stipend is a fixed sum of money paid periodically to support an individual’s living expenses, educational pursuits, or participation in a specific program or activity. Stipends are typically provided as financial assistance or compensation for temporary engagements such as internships, fellowships, apprenticeships, or research projects.

Features of Stipend:

• Education or Training Support: Stipends are typically provided to support individuals during periods of education, training, or research, such as internships, fellowships, or academic programs. They are commonly offered to students, researchers, or trainees.
• Non-Employment Income: Unlike salaries, stipends are not considered wages for work but rather financial aid or support given to individuals pursuing specific educational or developmental activities. Stipends may be offered by educational institutions, research organizations, government agencies, or private foundations.
• Fixed or Variable Amounts: Stipends can be fixed amounts or variable depending on the program or institution offering them. They may cover living expenses, tuition fees, research costs, or a combination of these, and are often disbursed at regular intervals.
• Tax Implications: While some stipends may be tax-free, others may be subject to taxation depending on the purpose and source of the stipend. For example, stipends granted for research purposes may be exempt from tax under certain conditions, while stipends for other activities may be taxable.
• Limited Duration: Stipends are usually provided for a limited duration corresponding to the duration of the educational or training program. Once the program or activity is completed, the stipend payments cease, and the recipient may transition to other forms of income such as salary or wages.

Salary and Stipend both involve the payment of money to individuals. Salaries are typically associated with employment contracts and regular work performed within an organization, whereas Stipends are often provided for temporary or educational purposes, such as internships, research, or training programs.