Do we have to PAY tax. if we get funds on our paypal account. Indian Paypal I am still searching for it. Because i have earned almost 1800 $ in my paypal fund and dont know about the paypal Tax... Any senior member living in INDIA who could advise. T_D
No idea about India, but in the UK i've never payed tax on paypal funds. Paypal is only a conduit for moving money.
The money in your PayPal account is income the same way receiving a check and depositing it at the bank is income. Obviously what you are doing is illegal, but it comes down to enforcement. I don't know what they are doing in other countries, but in the US the IRS has taken an interest in PayPal in recent years. They started by demanding that PayPal hand over offshore transaction information (for gambling, foreign bank accounts, etc...), and PayPal gave them member's info without a fight. Now they have set their target on eBay sellers who use PayPal, and PayPal will begin reporting that info in 2011.
If your services are using the resources from outside India and your customer are also not Indian, then I don't see any points for disclosing your income to Indian government. Offcourse if the Indian governement comes out with any policy then the circumstances would be different. Right now I don't see any reason for that.
It does not matter where your income comes from or what resources you use if you are a resident of India for the purposes of tax enforcement: Source: Income Tax Department, Department of Revenue, Ministry of Finance, Government of India (http://www.incometaxindia.gov.in/questionbank.htm)
Paypal income is not came from sky, its a income generated from business which was done by sitting in india ( Indian Resident ) and will be treated as professional income which is taxable in India , so as per criteria in which you land , you have to pay taxes. Currently tax starting @ Rs. 1,60,000 + Rs. 1,00,000 (if you invest money as per sec 80 of income tax.)
I am sure that India is the same as UK in that if you make profits from business on Paypal then you must declare the taxes - or potentially risk the results from tax evasion. Having said that- if you are only talking about a few hundreds dollars equivalent then I wouldn't worry about it. If you are dealing in thousands of dollars a month through Paypal then Paypal force you to create a business account and not declaring business of thousands = serious trouble if you are caught.
oks sry din't see this before, my work involves dealing with Indian banks , and as long as the you don't transfer your money from your paypal a/c to a Indian bank you are not liable for any taxes. but if the money in usd or any foreign hits your a/c then the appropriate taxes apply , which a local c.a can tell you in detail. and as long as the money received is less then 10000 usd p/a, then according to current r.b.i regulation you can declare it as personal gifts or anything 'to do with personal' and you are not liable for any tax if the declared income is in excess of 10000 usd then it is taxable and you would have to declare a source for it, if you don't then your bank is going to high light you to FEMA which believe me you don't want to get involved with.