Are Paypal Income taxable in INDIA? help me out

hi,

can you plz let me know is the amount we withdraw from Paypal taxable in INDIA?? SOme one told me that it isn't coz its earned from froiegn country?

I have no IDEA about this, so let me know if you are filing IT. thanks

 

Well it depends solely on your government and their laws.
I had a friend who worked as a professional juggler and would work internationally for circuses.
He once got paid over $600 in japan and had to report it on his taxes here in the United States because it was his legal residency.

And I googled this blog article
http://taxconsultant4u.com/2008/04/28/do-i-have-to-pay-taxes-if-i-live-and-work-abroad/
One of the paragraphs actually may apply to you.

 

All your earnings are taxable what may be it's source

http://www.jimkarter.com/2008-03-27-tax-liability-in-india-on-adsense-earnings.html

If u show paypal money as money from others then u can not get deductions as expenses can't be shown in these categories.

Normal annual income rule applies to ur total income....everything summed

 

I got around 50-60k from PayPal in last 2 months, No fees yet !

 

Nuh, there isn't TAX for citizens of India.
As paypal have no regulation for India Country inside the goverment. Europe people pay taxes for making bussiness with paypal. In Philipiness and Malysia paypal is Tax-payable.

For more refference just study India - Paypal "partnership" legal use, Law Policy.

 

thanks every one. Now let me use this example to make my self clear.

Suppose, I sell sites which exeeds 2-3lacs rupees per annum. I use paypal to withdraw it to my bank account here in INDIA, now will be liable to pay the IT. I suppose I'm more clear.

 

U will pay tax to amount u withdraw to your bank,they do not know about your paypal balance,wait for Deluxdon's reply.

 

Yea thats what I meant.. YEa sure, I ll wait for Deluxdon's reply..

 

Officially speaking, income tax is payable on income earned and not money withdrawn. As to where you pay the taxes at would depends on your domicile meaning where were you physically located at when you earn the money. If you are in India and earn the money online from a customer from the US, your domicile is in India and thus you are subjected to file the income for Indian Income Tax. However if you physically travelled to the US to perform the job then you are not subjected to Indian Income Tax but rather the US income tax system.

The term 'Income' is Earnings and not what you transfer back to India. So even if you earn $100k through Paypal and spent all of the money online and withdraw nothing back, you are still subjected to report the $100k earned. As to whether you be taxed would depend on your local tax law.

Whether your local government will find out if you do not report your income is not the issue, it is your responsibility as an Indian Citizen to report your income.

 

I think the best method of withdrawal from paypal is thru a credit card for Indians because it can be taxed.

 

you mean it is taxed itself?? or could you clarify yourself plz

 

Well whatever you earn money from PayPal or other way, you have to pay taxex on above 1,80,000 Rs. But you can use Section 80C offers or you need to gift to your parents, Mom or Sister which save taxes.

 

Don,can i hire u as my CA?

 

Thankyou Very Much, now I have an IDEA about taxation . will consult a CA soon.

 

Well You can take Tax Benifit upto 4,00, 000 TO 5,00, 000. Always take home items on the name of your Mom and Sister and shows as Gift. You can also show spending on Eduction and health Policy.

 

ok , I was planning to buy a CIVIC soon, So in case i get it by my mom's name will it work??

 

Save a bit !! I am saving all.

 

Well gift amount is limitede not for such a big amount.. I think CA person would give more better idea then us. He will suggest you to do such a things!