Stipends, Part-Time Work and Taxes

How students can earn through internships, tutoring and part-time jobs, and how scholarships, stipends and earnings are treated for tax.

Many students earn money through internships, tutoring, freelancing or part-time jobs. Earning while studying builds skills and savings, but it’s worth understanding the rules.

Ways students earn

Internships with stipends.
Tutoring younger students.
Freelancing: writing, design, coding or video editing.
Part-time jobs in cafés, shops or campus offices.
Teaching assistantships in universities.
Content creation online.

Balancing work and study

Limit hours so studies don’t suffer.
Choose work that builds skills relevant to your career.
Avoid unpaid work that offers little learning.

Scholarships and tax

In India, scholarships granted to meet the cost of education are generally exempt from income tax. This covers most academic scholarships.

Stipends and earnings

Stipends from internships are usually treated as income, though the tax treatment can depend on the nature of the payment.
Earnings from tutoring, freelancing or part-time jobs are taxable income.

However, if your total income is below the basic exemption limit, or within the range where rebates reduce tax to zero, you won’t owe tax. Under the new tax regime, individuals with modest incomes pay little or no tax due to rebates.

When to file a return

You may still want to file an income tax return if:

TDS was deducted from your stipend or payments, to claim a refund.
You want a record of income for loans or visas.

Get paid properly

Ask for written offer letters for internships.
Keep records of payments received.
Beware of “internships” that charge you fees.

The summer internship

A college student earns a 15,000 rupee monthly stipend for two months. Her company deducts a small amount of TDS. Her total income for the year is well below the taxable level, so she files a return and gets the TDS refunded.

Thinking students never need to think about tax

Stipends and earnings can be taxable, and filing a return may be needed to claim refunds of TDS.

Key takeaways

Students can earn through internships, tutoring, freelancing and part-time jobs.
Scholarships for education costs are generally tax-exempt.
Stipends and earnings are usually taxable income, but low incomes often owe no tax.
Filing a return can recover TDS and create an income record.