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You cannot be paid to undertake your Award residential activity, like all activities it needs to be voluntary.
Residential Project is time bound (5 days and 4 night) while Service is prolong session involving atleast one hour per week service. Service is connected to society but Residential Project is not necessary connected to community. Service section doesn’t require you to stay where you are doing your Service, while Residential Project does.
Few suggested Residential Project can be downloaded from here.