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Do A Indian blogger have to pay tax for his earnings !!

Discussion in 'Guidelines / Compliance' started by michealscorez, Jul 6, 2009.

  1. #1
    Hi,

    Can anyone help me.. One of my friend earn money through blogs ( from smorty, ppp etc..) Do he need to pay tax, If yes !! how to do it..

    Is transferring money from paypal to Indian banks like ICICI, HDFC , SBI etc is legal.. Because it involves with foreign currency. Is it allowed to transfer US$ to Indian bank account..

    PLEASE HELP !!:confused:

    Thank You
     
    michealscorez, Jul 6, 2009 IP
  2. khalid2167

    khalid2167 Active Member

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    #2
    Great
    I wanted to know the same thing as my son earned a significant amount from blogging and transferred the amount from his paypal account to his mother's ICICI Bank saving account.
    I will follow this thread to now from fellow DPians.
    Thanks
     
    khalid2167, Jul 6, 2009 IP
  3. Nick_Mayhem

    Nick_Mayhem Notable Member

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    #3
    Yes you have to pay that tax in India. Its your Income so you have to pay income tax.
     
    Nick_Mayhem, Jul 6, 2009 IP
  4. michealscorez

    michealscorez Peon

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    #4
    How to do it.. Because how to show earnings from paypal to income tax department.. Please give detailed explanations..
     
    michealscorez, Jul 6, 2009 IP
  5. Nick_Mayhem

    Nick_Mayhem Notable Member

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    #5
    Your bank statement from 1st April to next 31st March will do where you are hitting this money in.

    Take it to an accountant. Take your expenses bills like electricity, internet, PC repairs/purchase, etc.

    He will tell you more. I am not very good at accounts so I just go to the CA.
     
    Nick_Mayhem, Jul 6, 2009 IP
    arpitagarwal82 likes this.
  6. michealscorez

    michealscorez Peon

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    #6
    Consider..if i am transferring money from paypal to SBI .. and later after a week i withdraw the money and deposit it to another bank..say ICICI... Then how will i show the bank statements.. And how Income Tax Department know about the earnings, will bank intimates my deposits and withdraw to them..
     
    michealscorez, Jul 6, 2009 IP
  7. Nick_Mayhem

    Nick_Mayhem Notable Member

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    #7
    You have to show the statement of the bank you are hitting the money in the first time. So it will be your SBI account statement.

    Don't ever do swaps and multiple swaps. It doesn't mean anything.
     
    Nick_Mayhem, Jul 6, 2009 IP
  8. michealscorez

    michealscorez Peon

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    #8
    Is it ok .. to transfer money form one bank to another..
     
    michealscorez, Jul 6, 2009 IP
  9. Nick_Mayhem

    Nick_Mayhem Notable Member

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    #9
    Here is simple procedure.

    Keep one good stable Checking account. Withdraw all your funds everytime in that account. Pay all your bills etc from that account via A/C pay checks. If some expenses do require cash transactions then don't forget to take bills of that expenses.

    Make a small file of this papers for every year. At the end of that financial year. Get the bank statement from 1st April to 31st March and file that also in.

    The more banks you transfer the money to and from the more statements and documents you will have to provide for Filing. So you are creating more mess for yourself.

    Take this file to the accountant.

    Be clear and be stress free. You will see in some years that you did a good thing by paying up tax on the time.

    Accountants do have some good legal tips also for tax savings like insurance coverage, housing loan interest etc. If something is applicable in your case he will tell you so.
     
    Nick_Mayhem, Jul 6, 2009 IP
    Oranges and Blogspotter like this.
  10. michealscorez

    michealscorez Peon

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    #10
    Usually i use SBI for transfering funds from paypal.. after the money get tranfered i withdraw it and later deposit in ICICI.. so which bank statement i need to show..

    Sorry for repeated questions..
     
    michealscorez, Jul 6, 2009 IP
  11. Blogspotter

    Blogspotter Notable Member

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    #11
    I am not sure how much you are spending as expense, so I won't even go ito the expense etc if it is not too much as just declare the whole amount as Income and then apply standard deductions and pay the taxes.. There are hundreds of TAX consultants who will do ir fot 500-600 bucks ($10-15)..

    Just saw th bank statement of the primary bank where u wothdraw..
     
    Blogspotter, Jul 6, 2009 IP
  12. Nick_Mayhem

    Nick_Mayhem Notable Member

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    #12
    You have to show SBI account statement and There will be an entry in SBI account statement about your withdrawal to ICICI so :D that is why I said be clear and be stress free :)

    Now when you transferred the money to ICICI and that is also your checking account then you will have to show the statement of that account. If it is your saving personal account then it might be counted that you withdrew the money for your personal use. Which means you can't claim any business expenses on that money.

    The simple procedure above will really benefit you rather then hitting money into 1000 banks. Every bank has an entry of in and out.

    Best thing is to stick with 1 account so less hassles and less paperwork.
     
    Nick_Mayhem, Jul 6, 2009 IP
  13. michealscorez

    michealscorez Peon

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    #13
    Both SBI and ICICI is savings account.. So , is it need to change my SBI account to checking account..
     
    michealscorez, Jul 6, 2009 IP
  14. Nick_Mayhem

    Nick_Mayhem Notable Member

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    #14
    If you are doing business then Yes you need a checking account.

    I have not heard someone filing an Income tax form for saving account :( But then I don't know much. You should really ask some accountant.
     
    Nick_Mayhem, Jul 6, 2009 IP
  15. michealscorez

    michealscorez Peon

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    #15
    Just earning through posting articles and adsense..
     
    michealscorez, Jul 6, 2009 IP
  16. Nick_Mayhem

    Nick_Mayhem Notable Member

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    #16
    Yes :) But if you are earning then it is income and if it is income and you are liable to pay income tax depending on the earnings you are making Then you need to pay the income tax.

    It can be anything that you do as long as it is an income and above the standard tax slab [Which I guess was just raised yesterday by Pranab Mukherjee to 160,000 for Year 2009 - 2010] Then you might have to do some income tax filings.
     
    Nick_Mayhem, Jul 6, 2009 IP
  17. michealscorez

    michealscorez Peon

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    #17
    If i am not earning over 160,000 then i don't have to pay tax ..right.. And i still have a doubt on how the tax department know about our earnings by posing articles and adsense.. is it through bank.. if yes, then if i have savings account then how will they know..

    Anyway thanks for your help..!!!
     
    michealscorez, Jul 6, 2009 IP
  18. digitalX

    digitalX Active Member

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    #18
    yes you are right. if you are not earning ovr 160,000 then you will not b eligible to pay tax.


    as per my knowledge, the tax will be applicable as per your bank statement. you don't need to show them that what you are working and from where you are getting money. you just need to pay the tax against your bank statement if that will show the figure above 160,000
     
    digitalX, Jul 7, 2009 IP
  19. Nick_Mayhem

    Nick_Mayhem Notable Member

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    #19
    Are you converting Dollars to INR?

    Is paypal converting it to dollars to INR?

    Do you think paypal will not tell the government if government asks for it?

    So be safe and be clear :) Worrying over small amount of money is not going to take you far in business :)
     
    Nick_Mayhem, Jul 7, 2009 IP
  20. jitukothari4u

    jitukothari4u Peon

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    #20
    This thread is really good .........

    I was also searching for same information........

    Good questions and Good answers

    I am also from India......this thread helped me..

    Thanxxxxx

    Regards,

    Jitendra Kothari
     
    jitukothari4u, Jul 7, 2009 IP