Form 15G for Interns (2026 Guide): Stop 10% TDS on Stipends Legally

You land your dream internship, work grueling hours, and finally, payday arrives. But wait... why is your paycheck lower than promised? Welcome to the harsh reality of TDS (Tax Deducted at Source).

Form 15G for interns is the most effective legal declaration students use to stop unnecessary TDS deduction on internship stipends when annual taxable income remains below exemption limits.

💡 Quick Takeaway

If your estimated annual stipend income is below the tax exemption limit, you can submit Form 15G for interns to your HR department to stop the 10% TDS deduction completely and legally.

Answer in one line: If your annual internship stipend is below taxable limits and your final tax liability is zero, submitting Form 15G helps stop TDS deduction legally.

If you are a student or a fresh graduate earning a stipend, seeing a flat 10% sliced off your hard-earned money hurts. When you are just starting your career, every single rupee counts.

But here is the ultimate secret the HR department doesn't always advertise: You don't have to lose that money. By submitting a simple tax declaration, you can legally stop your employer from deducting taxes upfront. In this hyper-detailed guide, we will uncover exactly how to use Form 15G for interns to protect your stipend, and reveal a massive 2026 Income Tax proposal that might change the rules of the game.

Use Form 15G to legally stop the 10% TDS deduction on your internship stipend.

1. Is Your Internship Stipend Actually Taxable?

Before filling out forms, you need to understand why your company is deducting your money. From a purely legal standpoint, the word 'stipend' has not been mentioned exclusively in the Income Tax Act. Intern stipends are generally taxable depending on classification, but many companies will not deduct TDS if your income is below the threshold.

• If treated as Salary: If your employer issues a Form 16, your stipend will be taxed under the head 'Salaries'.
• If treated as Other Income: Otherwise, it is typically taxed under 'Income from Other Sources'.

Even if a company does not actively deduct TDS, the stipend might still be taxable in your hands depending on the exact terms of your payment. Note: Scholarships granted purely to meet the cost of education are exempt under Section 10(16). For a deeper dive, check out our comprehensive guide on whether your internship stipend is taxable and how to secure a refund.

2. What is Form 15G for Interns and Who Can Submit It?

Form 15G is a self-declaration form for resident Indians under the age of 60. Submitting Form 15G for interns ensures that no TDS is deducted from your income, provided your estimated total annual income is below the basic tax exemption limit.

Let’s look at the accurate math: According to the official Income Tax Department portal, while the basic exemption limit is ₹3,00,000 under the new regime, you can submit this form if your income is below the taxable level where no final tax becomes payable after rebate eligibility under Section 87A. If you are an intern earning ₹20,000 a month, your annual income is ₹2,40,000. Since your total income is well below this threshold, your actual tax liability is NIL. Instead of waiting a year to claim your TDS refund without a CA, you submit this form upfront.

🚨 2026 PROPOSAL: The Evolution to Form 121 🚨

Under the draft Income Tax Act 2025 framework, expected to take effect from April 2026, forms like 15G and 15H are proposed to be consolidated into a unified declaration known as Form 121. Final rules and notifications are still awaited from the CBDT, but it is crucial to prepare for this transition.

3. Step-by-Step Guide to Filling the Declaration

Whether you are filling out the classic Form 15G for interns or the newly proposed Form 121, the core logic remains the same. Here is exactly how to fill it out to stop your TDS deductions.

1. Basic Details: Enter your full name exactly as it appears on your PAN card. Fill in your complete address, and crucially, your PAN number. Select your status as 'Individual'.
2. Residential Status & Age: You must mention "Resident" as Non-Resident Indians (NRIs) are not eligible for this declaration. If you are an intern under the age of 60, simply select "No" when asked if you are a senior citizen.
3. Tax Year: Carefully enter the applicable tax year.
4. Nature & Estimated Income: Select the appropriate income category (e.g., Salary or Other Sources for stipends). Then, enter the total estimated stipend you expect to earn from this employer during the year.
5. Past ITR Details: If you filed an Income Tax Return in the previous two years, provide the respective acknowledgment numbers. Unsure if you need to file? Read our guide on the minimum income required to file an ITR for students.

Frequently Asked Questions (FAQs)

Can an intern submit Form 15G?

Yes! As long as your total estimated annual income is below the taxable threshold after considering rebate eligibility under Section 87A, you can submit Form 15G for interns to your HR department to stop them from deducting TDS. For more strategies, read how to avoid TDS on internship stipends completely.

What if my employer already deducted TDS before I submitted the form?

If the TDS has already been deducted and deposited with the government, the declaration cannot bring it back. You will have to wait until the end of the financial year and file your Income Tax Return to claim a refund. Make sure you compare ITR-1 vs ITR-4 for interns to ensure you file correctly.

Is the standard deduction applicable on a stipend?

If the stipend is taxed under 'Income from Other Sources', standard deduction under Section 16 is not available. However, if treated as salary by employer classification, tax treatment may differ.

Is the new Form 121 official?

Form 121 is currently a proposed consolidation under the drafted Income Tax Rules 2026 expected to roll out in April 2026. Always verify with the Official Income Tax Portal for real-time updates.

Final Thoughts: Secure Your Earnings

Earning your first stipend is a massive, life-changing milestone. Do not let taxes eat into your well-deserved payout when you are legally entitled to receive the full amount. Taking just 10 minutes to accurately submit your tax declaration can save you thousands of rupees upfront.

Author: Sahityashala Finance Research Team

Reviewed by: Tax Research Desk

Last Updated: March 2026

Disclaimer: The information provided in this article is for educational purposes only and does not constitute formal financial or tax advice. Always consult a qualified Chartered Accountant (CA) or verify with the official CBDT guidelines for your specific tax situation.