When you are earning from adsense there are two kinds of taxes that you need to pay, one is Service Tax (for services that you are providing to your advertisers), the other is Income Tax. Now you need to pay service tax only if your total yearly income exceeds Rs 10,00,000/- (Gross) You need to pay income tax if your yearly income exceed Rs 180,000/- for men and Rs 190,000/- for women Now there was no clarity as to whether the services provided by Indian webmasters for the sites hosted on foreign servers and run from their would fall into export of service as they are being paid in the form of middlemen commission by google adsense on monthly basis and the services are being run and operated from outside India and even google is generating the required business from outside India (through adwords), so this should correctly fall into the category of export of services which as a matter of fact is completely exempted from service tax. Many IT employees were not ready to heed to this fact and coupled with the IT ignorance in these government offices they prefer to stick to the rule book rather than get a clarification, but Google for its part has done the job for us and they could get Income Tax Office, India to issue a clarification on this part, which you can read here In the particular circular by the Income Tax Office, the part applicable for Adsense earners are quoted below: As adsense earnings clearly falls under the category of technical services (as a webmaster) provided by you which also is not an immovable property and the recipient of the benefit is ultimately located outside India or at least part of it in the form of google or adwords advertisers being located outside India and they are the ones who are generating business for us, if they are not there then there is no business generated for us. This logic seems to be working well with the Income Tax authorities and you get exemption from paying Service Tax, but one needs to pay his/her Income Tax for the full amount. However, to get you all these benefits you need to hire a Chartered Accountant who is clueful to these online earnings scenario and knows various provisions related to these earnings and exemption, so best option for you is to go and contact a good CA.
As we receive march earning in may so we should include that, it will be come under march or may next year when we will paying tax again .
Thanks still there is no such Tax, as we are getting it through Western Union, overall Pakistan govt is always looking for ways to collect more and more taxes.
in my country i don't need to pay taxes for adsense earning. so don't know about this. but is the rate of income tax same as that for other official jobs? do you guys have to submit any legal documents for this?