Internship Agreement — Employment (India)

An Internship Agreement — Employment in India sets out the terms of employment between employer and worker, covering pay, hours, leave, notice and the duties of the role.

The agreement covers the internship duration (start and end date), working hours, stipend amount and payment schedule (or explicit confirmation that the placement is unpaid), leave entitlements, confidentiality obligations, intellectual property ownership, conduct and social media expectations, and the basis on which the internship may be terminated early. Crucially, it clarifies the legal relationship between the parties — the intern is not a permanent employee and is not ordinarily entitled to statutory employment benefits such as Employees' Provident Fund (EPF) contributions under the Employees' Provident Funds and Miscellaneous Provisions Act 1952, gratuity under the Payment of Gratuity Act 1972, or Employees' State Insurance (ESI) coverage unless the specific facts and duration attract those entitlements.

The distinction between an internship and a formal apprenticeship under the Apprentices Act 1961 is legally significant: apprentices under the Act are entitled to a government-prescribed minimum stipend under the National Apprenticeship Promotion Scheme (NAPS), while corporate interns under a contractual internship arrangement are not subject to those mandatory stipend levels unless the organisation has registered under the NAPS scheme.

For interns who are minors (under 18), the agreement would be void under Section 11 of the Indian Contract Act 1872, which requires parties to be competent to contract. Organisations must verify the intern's age and obtain parental or guardian consent documentation where the intern is a minor or where the organisation wishes to establish a legally binding framework despite the age issue.

The Information Technology (Reasonable Security Practices and Procedures and Sensitive Personal Data or Information) Rules 2011 under the IT Act 2000 require organisations to implement data protection measures for personal data collected from interns, including Aadhaar numbers, bank details (for stipend payment), and educational records.

The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act 2013 (POSH Act) applies to interns who are women — they are entitled to protection from sexual harassment and access to the Internal Complaints Committee (ICC) on the same basis as regular employees. Organisations with ten or more employees must have a constituted ICC, and interns must be informed of the ICC's existence and their right to file complaints.

Organisations in the technology sector should note that software and code written by interns during the internship may constitute original literary works protected under the Copyright Act 1957. Without an explicit written IP assignment clause in the Internship Agreement, the default copyright position under Section 17 of the Copyright Act 1957 — which vests copyright in the employer for work created in the course of employment — may not automatically apply to interns who are not strictly employees. A strong assignment clause is therefore essential in every technology internship agreement. Forms-legal.com provides this Internship Agreement template as a starting point for India-compliant workforce documentation.

An Internship Agreement is needed whenever an organisation engages an intern — whether a college student on a summer placement, an engineering or MBA student on a mandatory industrial training programme, a law student on a summer associateship, or a recent graduate on a structured pre-employment training stint. The agreement must be signed before the intern commences work, not after, to protect the organisation's confidential information, trade secrets, and intellectual property from the first day.

Start-ups engaging student interns to develop software, conduct market research, or manage social media channels face the highest IP risk without a written agreement — any code, design, or content created by the intern could be claimed by them in the absence of an express assignment clause. Technology companies, law firms, investment banks, consulting firms, media organisations, and creative agencies all face similar risks.

Organisations that wish to register under the National Apprenticeship Promotion Scheme (NAPS) and claim the government stipend subsidy (25% of prescribed stipend, up to ₹1,500 per month per apprentice) must use the formal Apprenticeship Contract prescribed under the Apprentices Act 1961 rather than a standard internship agreement. For all other corporate internship arrangements not registered under NAPS, an Internship Agreement under the Indian Contract Act 1872 is the appropriate instrument.

Paid interns who receive a stipend are subject to Tax Deducted at Source (TDS) under Section 194J of the Income Tax Act 1961 if the stipend exceeds ₹30,000 per annum and is classified as professional fees, or under Section 192 if the intern is treated as an employee for tax purposes. The agreement should specify the TDS treatment to avoid disputes at the time of payment.

Universities and colleges that require students to complete mandatory internships as part of their curriculum — common in engineering, MBA, and law programmes — may require a tripartite agreement between the university, the organisation, and the student. The Internship Agreement should reflect whether this is a tripartite arrangement and whether the university's assessment requirements apply.

A thorough Internship Agreement (India) should include the following elements to be legally effective and protect both the organisation and the intern.

Parties and identification: Full legal name, address, and contact details of the organisation; full name, address, educational institution, course of study, year of study, and date of birth of the intern. For corporate organisations, the signatory's name, designation, and authority to bind the company.

Duration and working arrangement: Precise start date and end date; working hours per day and days per week; location (on-site office address, remote, or hybrid); and any flexibility provisions for the intern's academic schedule.

Stipend and payment: Monthly or weekly stipend amount (in Indian Rupees); payment date; mode of payment (bank transfer to intern's account with IFSC and account details); or explicit statement that the internship is unpaid with a clear acknowledgment by the intern. TDS treatment under the Income Tax Act 1961 — whether the stipend is subject to TDS under Section 192 (salary) or Section 194J (professional fees) — and the TDS deduction rate.

Duties and learning objectives: Description of the intern's assigned role, projects, and duties; learning objectives for the placement; name and designation of the supervising manager or mentor.

Confidentiality: Definition of confidential information (proprietary data, client information, product plans, source code, financial data, trade secrets); obligation to protect confidentiality during and after the internship; return of confidential material on completion.

Intellectual property assignment: Express assignment to the organisation of all intellectual property — including copyright under the Copyright Act 1957, inventions, designs, and software — created by the intern in connection with the internship, in consideration of the stipend and training opportunity. This clause must comply with Section 10 of the Indian Contract Act 1872 (consideration required).

Conduct and social media policy: Reference to the organisation's code of conduct, IT acceptable use policy, and social media policy applicable to the intern.

Termination: Notice period for early termination (typically 3–7 days by either party); grounds for immediate termination without notice (misconduct, breach of confidentiality, dishonesty).

No employment relationship: Express statement that the internship does not constitute, and does not create any right to, permanent employment with the organisation; no entitlement to EPF, gratuity, ESI, or other statutory employment benefits unless separately agreed in writing.

Governing law and dispute resolution: Indian law governs the agreement; disputes to be referred to arbitration under the Arbitration and Conciliation Act 1996 or to the courts of the city where the organisation's registered office is located. Forms-legal.com provides this Internship Agreement template as a starting point for India-compliant workforce documentation.