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I did my BS-MS dual degree in India, and while pursuing my degree (was a full-time student) I was offered a scholarship. Can this scholarship be considered as an employment? Should I include this in the DS160 form for U.S. F1 visa?

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Assuming you mean a scholarship in the sense of money paid you to allow you to study, and not in return for work, then no that does not count as employment. If you are asked about other income then you should report it.

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