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Pyapal transfer to our Banks - Should we pay Tax?

Discussion in 'Payment Processing' started by sangs, Mar 14, 2009.

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  1. #1
    I have a query here.

    Dollars which we transfer from Paypal account to our Indian Savings Accounts we are not paying any tax for that.What can be the legal issues which we might face from Income Tax department in India.We all now have Pan numbers and all the savings accounts are linked to the Pan numbers.So if necessary the IT department can always lodge a complaint of disproportionate income on us.

    Any idea whether this can be an issue here?
     
    sangs, Mar 14, 2009 IP
  2. deluxdon

    deluxdon Catch Me If You Can...!!!™ Staff

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    #2
    First of all you need to show your this income (through paypal you get) in your income tax form at the time of filling your return for that financial year and if you need to pay any tax on your income then you have to pay that after all excemption.

    DON.
     
    deluxdon, Mar 14, 2009 IP
  3. Elvos

    Elvos Active Member

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    #3
    if you dont submit that income then you are risking to pay a fee.....
     
    Elvos, Mar 14, 2009 IP
  4. eddy2099

    eddy2099 Peon

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    #4
    Income tax is based on income which you earn while you are physically in that country. So if you are in India when you earn the money through Paypal, the income is subjected to income tax no matter whether you bring it back to India or not.

    Remember, it is Income Tax and not Bank Deposit Tax.
     
    eddy2099, Mar 14, 2009 IP
  5. kittyluver

    kittyluver Notable Member

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    #5
    You need to pay tax and submit FORM-16 to enjoy the money you're getting. BEWARE YOU'RE LIABLE TO GET IMPRISONMENT ALSO!
     
    kittyluver, Mar 14, 2009 IP
  6. RightMan

    RightMan Notable Member

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    #6
    Income from the internet should be treated just like any other income and one is liable to pay tax depending on the income bracket one's income falls into...(of course after deducting the eligible expenses and exemptions! ;))

    Regards,

    RightMan
     
    RightMan, Mar 14, 2009 IP
  7. indiarahul

    indiarahul Peon

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    #7
    I assume that you are providing service outside India and are receiving money for the same via paypal if you have a turnover of more than 10 Lac in a given financial year then you are liable to pay service tax @ 10.36% then comes the issue of Income tax

    If you are providing service out side India you can get service tax exemption for that you need to provide that you are receiving funds from abroad now this is a problem with paypal they make a NEFT transfer to your account so its considered as a domestic transfer as paypal does not provide (FIRC Foreign Inward Remittance Certificate) all the income will be liable for service tax
     
    indiarahul, Mar 14, 2009 IP
  8. kolucoms6

    kolucoms6 Active Member

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    #8
    Agree with Rahul.

    Also, when u are withdrawing in your bank, anyways it comes into your accounts.

    So, no special mention of paypal required.
     
    kolucoms6, Mar 14, 2009 IP
  9. manu_v_singh

    manu_v_singh Banned

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    #9
    it is better to pay whatever tax is coming up against the income you have earned.
     
    manu_v_singh, Mar 14, 2009 IP
  10. olddocks

    olddocks Notable Member

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    #10
    just hire an accountant. I think most will charge about Rs.3k to 5k annually and you will get the best advice. You need not confuse yourself and he can save you a lot of tax money you owe to govt. There are so many regulations in IT law only auditors would understand, not webmasters.
     
    olddocks, Mar 14, 2009 IP
  11. sangs

    sangs Well-Known Member

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    #11
    Hi,
    Thanks for your advice.
    Yes I earn funds from abroad and within India as I am a seller in ebay like many others.As you rightly put it though the money is transferred by Paypal its not showing as a foreign remitance here.Say in a year I earn 5 lakhs by transferring Paypal Dollars to my Indian savings account I need to pay the required Tax for that 5 lakhs.

    Am I correct?
     
    sangs, Mar 14, 2009 IP
  12. deluxdon

    deluxdon Catch Me If You Can...!!!™ Staff

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    #12
    If you earn 5 lakhs throughout a financial year then you have to pay tax on around 2.5 lakhs after deducting the eligible expenses and exemptions! (1.50 lakhs exemption + 1 lakhs (ppf,nsc,lic etc.)). Better you hire someone to do this job for you (ca near to you).

    DON.
     
    deluxdon, Mar 14, 2009 IP
  13. RightMan

    RightMan Notable Member

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    #13
    DON is correct in his assessment of how much you are liable to pay tax. I would advise you to take the service of a good chartered accountant who would readily guide you and show you various ways and means through which tax liability can be reduced...in a legal manner! :rolleyes:

    Regards,

    RightMan
     
    RightMan, Mar 14, 2009 IP
  14. sangs

    sangs Well-Known Member

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    #14
    Thanks.
    Actualy in my Form 16 income incurred from other sources (where I am employed) will also reflect.So all the investments amounting 1lakh will take care of that itself.
     
    sangs, Mar 15, 2009 IP
  15. kolucoms6

    kolucoms6 Active Member

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    #15
    If I earn 1000$ in March 2009 and withdraw in arpil 2009 , then which accouting year this amount become taxable ?
     
    kolucoms6, Mar 15, 2009 IP
  16. flaco

    flaco Peon

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    #16
    Tax year 2009. Most tax years in most countries run January 1st-Decemeber 31st.
     
    flaco, Mar 15, 2009 IP
  17. rahuldas14

    rahuldas14 Well-Known Member

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    #17
    but i dont think we will be taxed if we hv paypal transfer less than the taxable income. am i rite?
     
    rahuldas14, Mar 15, 2009 IP
  18. RightMan

    RightMan Notable Member

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    #18
    If you are extensively using paypal for collecting online income and if online activity is your major business activity, then you might be needed to maintain and submit even your paypal account statement which will mean that your income would be counted for the financial year 2008-09.

    Regards,

    RightMan
     
    RightMan, Mar 15, 2009 IP
  19. deluxdon

    deluxdon Catch Me If You Can...!!!™ Staff

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    #19
    If you withdraw in april 2009 that means money hit your bank account in April 2009 so you need to count that income for accounting year 2009-10 (financial assessment year 2008-09). Better you consult your CA and he'll guide you further in this properly.

    DON.
     
    deluxdon, Mar 15, 2009 IP
  20. sangs

    sangs Well-Known Member

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    #20
    I need a small clarification here.

    Most of the items which we sell through Ebay don't contain a proper Invoice with Registration numbers and all.The buyer pays us based on an automated Invoice generated by ebay sent through email.

    The moment we have to show this income under Form 16 and pay Tax the authorities would ask us the source which means proper documents of bills need to be shown.Neither we have a proper Invoice nor we can make one.Also the moment we go for a proper Invoice Sales Tax will come to the picture.

    So how do we resolve this while paying the Tax.Can anyone of you please suggest?
     
    sangs, Mar 17, 2009 IP
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