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[INDIA] I get my salary through paypal. How should I pay taxes

Discussion in 'Legal Issues' started by fundu, Jan 20, 2011.

  1. #1
    I work for a US based company who pay me through paypal. How should I proceed for paying my Income tax. When is the right time to pay my taxes.
    SEMrush
     
    fundu, Jan 20, 2011 IP
    SEMrush
  2. olddocks

    olddocks Notable Member

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    #2
    talk to an accountant and he will advice you what to do.
     
    olddocks, Jan 21, 2011 IP
  3. mohamedsafiq

    mohamedsafiq Active Member

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    #3
    Hi indian, actually if your account is personal i think no need to pay any taxes because you only allowed to make transaction within tax limit in personal account,if you using business account consider an auditor.
     
    mohamedsafiq, Jan 21, 2011 IP
  4. sachin410

    sachin410 Illustrious Member

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    #4
    Do you actually have a legal employment contract with the company or they just send you a monthly payment for your work?

    If they are just sending you a monthly payment and there is no contract on paper, you should show yourself as a freelancer and not a full-time employed person.

    If you file your return as a freelancer, you will be able to deduct all legitimate expenses from your gross income. You taxable income in that case will be much lower.
     
    sachin410, Jan 21, 2011 IP
  5. Cod3ing

    Cod3ing Peon

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    #5
    You need to be working under a contract in order to pay Tax's.

    If you are working under a contract then you should contact paypal
    and ask if you need to pay tax's for the money that you make
    through the online US company.
     
    Cod3ing, Jan 22, 2011 IP
  6. deluxdon

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

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    #6
    Money comes in your indian bank account from paypal so you need to show that in your IT Return.

    DON.
     
    deluxdon, Jan 23, 2011 IP
  7. fundu

    fundu Well-Known Member

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    #7
    I work as a full-time employee and I do have an offer letter from the company. (I even have an equity in the company). Its not a contactual work. I'll probably talk to my CA friend. :D
     
    fundu, Jan 25, 2011 IP
    seojig likes this.
  8. ameerulislam10

    ameerulislam10 Peon

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    #8
    I don't know about India but in my country it's treated as foreign remittance and thus no Tax is due as banks already charged me for the money. I think the rule should have been similar for India. I'm your neighbor from Bangladesh.
     
    ameerulislam10, Jan 26, 2011 IP
  9. mob

    mob Active Member

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    #9
    Income is received from outside India to the Assesse within India, It falls under the provisions of Income Tax Act, 1962. you are liable to pay tax under the heads of either Income from Salary or Income from Other Sources.
     
    mob, Jan 27, 2011 IP
  10. onetrickaday

    onetrickaday Peon

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    #10
    i am about to file my first income tax returns this year . never heard about . never heard about that "foreign remittance" thing . need to talk to my CA
     
    onetrickaday, Jan 27, 2011 IP
  11. mob

    mob Active Member

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    #11
    It means Money Received from a Foreign Country.
     
    mob, Jan 27, 2011 IP
  12. onetrickaday

    onetrickaday Peon

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    #12
    yes , but do we have to pay additional tax over it . i mean im already paying under the usual slab , as all money is white , and transactions are made through neft or cheque . i have account of every single penny earned
     
    onetrickaday, Jan 27, 2011 IP
  13. seojig

    seojig Well-Known Member Affiliate Manager

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    #13
    As you are getting money to your bank account through paypal. You need to pay tax for the income over 1.6 lacs (there are different income slabs and non taxable income/investment etc..) kindly consult your accountant, he can help you in file form 16.
     
    seojig, Jan 28, 2011 IP
    fundu likes this.
  14. Nefertiti

    Nefertiti Peon

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    #14
    If you're a full time employee, then your employer must be showing the salary remittance in their books of accounts. Now, whatever maybe the mode of salary payment, it doesn't matter, you have to file IT Returns before the scheduled dates. Please visit National Website of the Income Tax Department of India, you can file returns online, you can calculate and pay taxes online (if your income is taxable).

    Please note: the method of salary payment is not a problem at all. Main thing is filing of returns, then, if taxable, pay taxes or if not taxable sit quiet.
     
    Nefertiti, Jan 28, 2011 IP
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  15. EvanP

    EvanP Banned

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    #15
    Not sure about India, but here in the UK you wouldn't be required to pay tax on that... Talk to a professional first before listening to me though.
     
    EvanP, Jan 28, 2011 IP
  16. Nefertiti

    Nefertiti Peon

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    #16
    Starting March 1st 2011, you may not be able to receive more than $500 in your Paypal if you're in India. So if your salary is more than that, you may need to look around other forms of payment receipts.
     
    Nefertiti, Jan 29, 2011 IP
  17. dscurlock

    dscurlock Prominent Member

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    #17
    foreign exchange rate or paypal fees do not constitue as taxes paid. If the USA company submits him to the IRS for taxes, then
    he can pay taxes, but to be honest, what is the IRS going to do to him living in India...? If he does not have any
    US assets, then there is not much USA can do if he decides not to pay taxes...
     
    dscurlock, Jan 29, 2011 IP
  18. ameerulislam10

    ameerulislam10 Peon

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    #18
    Is this rule for paypal, or if you earn over 1.6 lac online regardless the way you receive it will be subject to TAX? I guess we are enjoying a big relief here in Bangladesh. We don't have to pay tax for any foreign income that came through banks. As Banks takes it's portion before they even credit the amount to our accounts.
     
    ameerulislam10, Jan 30, 2011 IP
    fundu likes this.
  19. newgenservices

    newgenservices Well-Known Member

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    #19
    That's not $500 per month. The new policy is just $500 per transaction. So he can get it by either splitting the transaction if it is more than $500 or choose a different payment method if his employer can not pay in multiple transactions.

    If the person is a resident (lived in India for at least 182 days) for that assessment year, then if the net income is taxable irrespective of the mode the person received it whether online or offline, it is taxable. TDS is not applied by banks in India for inward foreign remittances. From what you mentioned, I understand Banks in Bangladesh are applying TDS for inward foreign remittances irrespective of the person's net income. So comparatively, the system followed here in India makes it better for small time freelancers and others whose net income is not taxable. For others, it would not matter whether tax is deducted at source or if he is liable to pay it. Correct me if I'm wrong.
     
    newgenservices, Jan 30, 2011 IP
  20. ameerulislam10

    ameerulislam10 Peon

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    #20
    I think they don't apply TDS (Tax deducted at source) on that money. I just get lower conversion rates. For instance around 68.3-68.7/Dollar. While the market price is around 70-71 . If I calculate the deduction rate {71-68.3=2.7, (2.7/71)X100=3.8% . 3.8% is not even a minimum Tax rate for any country. (Please not this calculation is applied for my payoneer debit card, Not paypal. We don't have paypal here in Bangladesh). I'm just pointing out the charges that are applied to receive a foreign remittance. And there is no Tax due. I'm guessing in India you have to pay these conversion fees and then additionally have to pay Tax. We don't have Tax yet, who knows when they start to apply it.
     
    ameerulislam10, Feb 1, 2011 IP