With increased globalization, India is a much sought after destination, not only for foreign investment but for International Students seeking Internships in Indian NGO’s. Many of the Indian NGO’s are doing yeoman social services and attracting global attention, including students from the developed countries in the US and Europe, seeking an immersive experience here. So much so, there are many organizations who list these NGO’s and their work is shared in the public domain, like NGO Darpan of NitiAyog, Guidestar India, Internship platforms like Internshala, Letsintern etc. and specialized agencies like AIESEC, which focus on bridging NGO’s with Foreign students. As an illustration, in Teach for India, a selection is competitive and also considered a coveted job for Graduates from some of the top US Universities.
Hitherto, these students came to India masquerading as tourists and NGO’s considered them as Volunteers and both parties had accepted that this was the most practical solution. However, this posed many risks viz inability of the NGO to recognize the contribution and issue any Internship Certificate to the student, compensation could not be officially made in the absence of a work visa, anti-national activity could go unmonitored by the State further compounded if the NGO was receiving Foreign Contributions from mischief makers, no defined criteria for Internship paving the way for undesirable elements to sneak into the country and work on the ground etc.
In recent years with the plethora of NGO’s and FCRA Registrations to which a significant number did not comply with simple annual return filings or transparency into their operations, the risks of anti-national activities have drawn Governmental attention and the Home Affairs Ministry has been clamping down in terms of cancellation of FCRA Registrations in huge numbers. Likewise, the need for regulations and monitoring of Foreign Contribution in kind, viz Internships has been introduced in the form of i) Visa Regulations, ii) contractual framework between the NGO and the Intern, iii) Qualifying criteria of an Intern, iv) duration of Internship, v) prohibited list of sectors, vi) tax compliance for any income, vii) FRRO Registration with the local Police under certain conditions, viii) Registration of the NGO with the Government etc.
Internship and Interns?
When a student or trainee works in an organization, sometimes without pay or on a nominal Stipend in order to gain practical work experience, which may be a part of their respective curricula. Such student work engagement is termed as Internship and the person undergoing such training is referred to as an Intern.
Who qualifies as an Intern?
As per the new Visa Regulations in 2017, any student can join as an Intern immediately after completion of graduation or post-graduation but the gap between the completion of graduation or post-graduation and the commencement of the Internship should not be more than two years. However, for students who are yet pursuing their under-graduation, whether they are eligible for foreign Internship is still a grey area as the government guidelines are silent about the same.
However, students under the French International Internship Programme (VIE), they can apply only within one year of graduation.
Can all Indian NGO hire an International Intern?
As per the strict interpretation of the new Visa Regulations of 2017, all NGO’s are qualified to hire International Interns, should the regulations be followed. However, there is a snag. The respective Indian Embassies seek registration of the NGO with The Ministry of Home Affairs. Now, only those NGO’s who have FCRA Registrations would be able to provide this registration. All other Non-FCRA NGO’s are not obliged to register with the MHA and hence would be stuck in providing an MHA Registration nor are aware if there any other Scheme, apart from FCRA for NGO’s to register with the MHA. It is recommended to register with NGO Darpan run by NitiAyog so that the NGO has a Government Registration as an entity.
Internship Agreement – Some Key Elements
Internship agreement forms the important part of the Internship programme. The Agreement should include:
- An objective of the Internship programme.
- The scope of the Work/training of the Intern.
- Duration of the Internship. As per the guidelines issued by the government, the duration of the Internship cannot be more than one year.
- Reporting Relationship.
- Location of Internship.
- Code of Conduct.
- Internship remuneration. As per the guidelines,
- In case the intern is granted remuneration, then such income earned by the Foreign National will be governed by the Income Tax Act, 1961.
- When the internship is with a Company, the foreign national being sponsored for the internship should draw a minimum remuneration of Rs. 7.80 lakhs per annum.
- There will be no minimum salary limit in the case of an internship in Educational institutions and NGOs.
- In case the internship with the NGO is an unpaid Internship, an undertaking should be given by the NGO that there is no payment made to the intern in any other form.
- Termination clause
Verboten Sectors/Countries for International Interns
- Intern visa will not be issued for an internship in certain vital sectors such as defense, telecom, space technologies, mining, civil aviation, construction / strategic infrastructure projects, petroleum and natural gas exploration, private security agencies, human rights, nuclear energy, environmental issues, and dams
- Intern visa shall not be granted to nationals of Pakistan
- For nationals of Afghanistan, China, Iraq, Nigeria, Somalia, Sudan or a foreign national of Pakistan origin or a stateless person, visa shall be granted only after obtaining prior clearance from the MHA
Duration of Internship
The period of internship shall be restricted to the duration of the internship programme or one year, whichever is less. If a student is visiting India under the French International Internship Programme (VIE), for them internship duration shall be valid for a maximum period of 12 months and can be renewable ONLY ONCE for a further maximum period of 12 months.
Annual Country-wise Cap of Internships
Internships will be granted to a maximum of 50 interns per year for each Indian Mission/ Post. This limit will be 100 per year for countries where the PIO (Person of Indian Origin) population is more than 1 million.
Under the French International Internship Programme (VIE), The Intern Visa would be issued to a maximum number of 250 interns per year.
Pro-Bono and Paid Internship
Internships can be of Two types:
- In case the internship is in a Company, the foreign national being sponsored for an internship should draw a minimum remuneration of Rs. 7.80 lakhs per annum.
- In case the intern is granted remuneration, then such income earned by the Foreign National will be governed by the Income Tax Act, 1961. As such income is earned in India, as per the provisions of the law such income becomes taxable in India and the company paying such amount also needs to comply with the TDS provisions applicable to non-resident (Sec 195 of income tax act 1961.)
- There is no minimum salary limit prescribed in the case of an internship in Educational institutions and NGOs. The NGO’s appointing interns do not have to follow any payment criteria’s for the Intern. An internship can be without any payment also.
- In case the internship with the NGO is for volunteering purpose, i.e. there is no payment made. Then there won’t be any tax implications for the Intern, however, an undertaking should be given by the NGO that, they is no payment made to the intern in whatsoever nature and that there will not be any tax implications.
The Visa Regulations does not specifically recognize a Sec 8 company and it is not clear whether an Intern in an NGO which is a Sec 8 company has to provide remuneration at Rs 7.80 lacs per annum. Our view is that many a time Sec 8 company gets for some reason ignored by regulators and cause much ambiguity and the acronym NGO is also not defined in any statute?
Taxation on Internship
Income earned by the Interns is liable to pay applicable taxes in this country. As such income is earned in India, as per the provisions of the law such income becomes taxable in India and the company paying such amount also needs to comply with the TDS provisions applicable to non-resident under Sec 195 of income tax act 1961 which is at 30% or a lower rate should a Double Taxation Agreement prescribe one between India and the country of origin of the Intern.
Undertakings expected from the NGO
- The Indian NGO concerned sponsoring the foreign national for the internship programme has to provide the Internship agreement clearly indicating the period of internship. This letter has to be on a letterhead of the organization duly signed and stamped.
- An undertaking letter is required from the NGO in India confirming that the NGO concerned will ensure the departure of the foreigner on completion of Internship. This letter has to be on a letterhead of the organization duly signed and stamped
- In case of a paid intern, the remuneration documents have to be enclosed with the amount and confirming that the tax will be paid as per the guidelines implemented by the Government of India. This document has to be on a company letterhead duly signed and stamped.
- The intern must provide a letter from the NGO in India taking responsibility for the activities and conduct of the applicant during his/her stay in India and repatriation, if ever necessary. This letter has to be on a company letterhead duly signed and stamped. ( This letter needs to be issued if the same is sought by the department)
Interns – Keep this in your mind!
- The Intern should comply with the relevant laws and regulations of all the Trust’s rules and regulations;
- He/She shall abide by the terms and conditions set forth in their internship agreement.
- Foreign nationals granted a visa for doing an internship will have to register themselves with the FRRO / FRO concerned within 14 days of arrival in India if a continuous stay is for more than 180 days.
Things to be taken care of by NGO’s
- FCRA registration is advisable, as Grant of visa for pursuing an internship with NGOs shall be subject to prior clearance of MHA
- Internship agreement to be executed.
- An intern is assigned the stated work only and at the disclosed location.
- The NGO in India has to ensure that the departure of the foreigner on completion of Internship.
- NGO has to make sure that in case of Remuneration paid to the Intern and tax compliance of the same.
All Western nations have far more stringent Visa Regulations. These new Visa Regulations for Interns in India are welcome and recognizes that NGO’s from India have indeed a global audience. Some codification on Internships would certainly contribute attention and volunteerism for various socio-economic causes. However, some of the wrinkles viz Registration of NGO with Ministry of Home Affairs where FCRA Registration has not been sought needs to be plugged. Also, Sec 8 companies warrant due recognition as to which side of the fence they belong. As NGO or as Company?