1. Advertising
    y u no do it?

    Advertising (learn more)

    Advertise virtually anything here, with CPM banner ads, CPM email ads and CPC contextual links. You can target relevant areas of the site and show ads based on geographical location of the user if you wish.

    Starts at just $1 per CPM or $0.10 per CPC.

Indian Freelancers = How do you pay tax?

Discussion in 'Legal Issues' started by gopalgkb, Oct 8, 2007.

  1. #1
    Hello Indian friends

    Just wondering what are the methods used by you to pay tax.

    Do you allow deduction at source, do you pay tax in India or do you believe you are exempted from paying ?

    A guy scared me to death when he said you are not allowed to earn from a foreign source unless your register with FEMA. In all probablity he was showing the prison bars to me...

    I thought I should ask all the experienced guys who have been doing freelancing or offering their services for long

    Thanks

    Jeet
    gopalgkb, Oct 8, 2007 IP
  2. stock_post

    stock_post Notable Member

    Messages:
    5,213
    Likes Received:
    248
    Best Answers:
    0
    Trophy Points:
    260
    #2
    I don't think it is crime to work and earn money.
    -- talk to an Accountant and they will tell you.

    FEMA rule may apply if you earn in millions not just for freelancing your time.
    -- If you have employees etc, you may start the registration work..
    stock_post, Oct 8, 2007 IP
  3. roosevelt

    roosevelt Peon

    Messages:
    73
    Likes Received:
    0
    Best Answers:
    0
    Trophy Points:
    0
    #3
    Your friend is right you cannot work as an employee overseas unless you have the permission from your own country and the country you are working for. But if your uncle from USA sends you money to India through his friend, does your government charge him? No, right?

    So similarly you can work for some guy, and the money you get could be just your uncle sending you ;).
    roosevelt, Oct 8, 2007 IP
  4. it career

    it career Notable Member

    Messages:
    3,521
    Likes Received:
    155
    Best Answers:
    0
    Trophy Points:
    220
    #4
    Indian govt cannot provide us with a job, from next year 50% reservation are coming in education, job ,etc , so we have two option stay within law of the country and die out of starvation or try work for some people outside india and make our living and go to jail
    People commiting rape and murder are getting a bail within 15 days, case dragging for 15-20 years, by that time the victim's family would have passed away and the case getting dismissed.
    I know hundreds of car owner who have killed dozens of people but are roaming freely
    However if you earn $50 per month and deposit it to your bank account, govt will catch you on fema violations (There is solid proof that you have violated law of the country) and put severe penalty(3 times your earning) and can award ten years of imprisonment.
    it career, Oct 8, 2007 IP
  5. dilipsam

    dilipsam Peon

    Messages:
    605
    Likes Received:
    28
    Best Answers:
    0
    Trophy Points:
    0
    #5
    LOL. Long time I laughed here. For the thread starter and others:

    Open a Royal Bank of Canada account (I don't know which account but this is what my friend told me). They'll give you a debit card too and you can transfer your Paypal funds. This, he says, will keep Tax hunters and FEMA at bay. Is this correct? Pls correct me if I'm wrong. I haven't tried it out yet.
    dilipsam, Oct 8, 2007 IP
  6. gopalgkb

    gopalgkb Guest

    Messages:
    145
    Likes Received:
    4
    Best Answers:
    0
    Trophy Points:
    0
    #6
    Hello friends

    Thank you for your views.. Wish we could have some more replies from experts who have been already doing freelancing in India and earning foreign income.

    The replies to this question has further confused me. What am i supposed to understand.... Is it a crime to earn foreign income (of course income by ethical means).

    What are you all doing? Can someone be more specific about the rules and regulations and how to go about it please......

    Thanks

    Jeet
    gopalgkb, Oct 9, 2007 IP
  7. Indian_Webmaster

    Indian_Webmaster Banned

    Messages:
    1,298
    Likes Received:
    61
    Best Answers:
    0
    Trophy Points:
    0
    #7
    No It is not a crime at all to earn foreign income...

    Best way is just exempt from paying Taxes by doing investments. I am doing web-mastering since 5 years but never had paid a single rs as Tax. I am doing regular short term and long term investments..
    Indian_Webmaster, Oct 9, 2007 IP
  8. gopalgkb

    gopalgkb Guest

    Messages:
    145
    Likes Received:
    4
    Best Answers:
    0
    Trophy Points:
    0
    #8
    Indian_Webmaster: Thanks for your reply. Good to hear some good news atleast that it is not a crime......

    Sorry to be more messy, but just two questions at this stage please.

    1) When you say to make investments, there has to be limit in it too right ? I
    mean say for example if you cross 2 lacs per annum, after standard
    deduction of one lac...let us say you made investment for another one
    lac. Now whether you earn from foreign source or indian source, you are
    still liable to pay tax after 2 lacs, right? Check me if i am wrong......

    I know I am asking a question which has no relevance to me at this stage,
    but it is still better to have knowledge and also for others.

    2) When you say you dont pay tax.... how do you take the situation ??

    a) You are confident by knowing the basic rules such as you can make
    investments to get exempted from paying tax.

    b) You have just adopted " I dont care" attitude.. which could be risky in
    future.. Dont take it wrong.. I am just trying to debate for true
    knowledge.

    Or even better, you have no reason to worry since you might have not made amount above 2 lacs per year from where the question of tax paying actually starts for Indians during these 5 years ??

    Thanks

    Jeet
    gopalgkb, Oct 9, 2007 IP
  9. sambro

    sambro Peon

    Messages:
    27
    Likes Received:
    0
    Best Answers:
    0
    Trophy Points:
    0
    #9
    hi DP guys,
    The thread still needs the correct answer. Can somebody help me out?

    regards,
    sambro
    sambro, Aug 13, 2010 IP
  10. olddocks

    olddocks Well-Known Member

    Messages:
    3,235
    Likes Received:
    164
    Best Answers:
    0
    Trophy Points:
    153
    #10
    you have to pay income tax just like any other income be it foreign or earned within india. Consult a CA in your area and he will guide you through the process. He will charge you 1k-3k and trust me he will save you hell lot of money from paying taxes + you dont need to get afraid. You can also start a proprietorship, get a PAN and IEC to start earning money from outside.
    olddocks, Aug 18, 2010 IP
  11. lcwadminbj

    lcwadminbj Peon

    Messages:
    402
    Likes Received:
    16
    Best Answers:
    0
    Trophy Points:
    0
    #11
    IF YOU WANT THE 100% correct answer then get a lawyer
    lcwadminbj, Aug 20, 2010 IP
  12. kbx911

    kbx911 Peon

    Messages:
    7
    Likes Received:
    0
    Best Answers:
    0
    Trophy Points:
    0
    #12
    Hello,
    Thanks to the thread starter for starting this thread. I am looking for an answer too.

    All those people who wrote about being afraid, of course it is not wrong to earn in dollars. If anything, it should be awarded, since we are getting foreign money into the country, while staying in the country, by nothing more than our mental skills. We are not using any other raw material apart from our time, training, ideas, electricity, computer cost, ISP bill. Right? The government should in fact award us with bonus but that's too much to ask. From the Indian government anyway.

    Basically, if you earn above the minimum taxable amount (which is Rs. 1,80,000 currently in 2011 if i'm not wrong) then you need to pay income tax.

    However i too am confused as to the rate of tax that will apply to people like us who get paid through paypal. Would it be less than say the income we got from someone who paid us in rupees from within India itself for a similar service? It should be less since we are earning Foreign Exchange for the country in the former case, but i suspect the IT Dept doesn't give a rat's ass unless we are earning in lakhs every month.

    It would be great if someone can either write, or point to an already thoroughly written blog, resource which explains in detail the entire process of going about paying tax and getting tax returns etc. for Indian freelancers, working from India, earning through Paypal etc.

    Thanks.
    kbx911, Oct 15, 2011 IP
  13. moneylover1989

    moneylover1989 Peon

    Messages:
    27
    Likes Received:
    0
    Best Answers:
    0
    Trophy Points:
    0
    #13
    I agree with that we are helping our country by getting money from foreign . I am too want an answer or source for

    1.How to pay income tax by an freelancer India .

    2.1.How to pay income tax by an freelancer India who earning money in dollars ?
    moneylover1989, Jan 26, 2012 IP
  14. priyaverma2012

    priyaverma2012 Peon

    Messages:
    32
    Likes Received:
    1
    Best Answers:
    0
    Trophy Points:
    0
    #14
    If you have some domain or website which is the money source you have register or something then you can pay tax.
    sorry but i am really not good in this.
    priyaverma2012, Jan 27, 2012 IP
  15. Laora

    Laora Peon

    Messages:
    140
    Likes Received:
    1
    Best Answers:
    0
    Trophy Points:
    0
    #15
    if your income cross 1.6 lakhs per year ( for male ) and 2 lakhs for felamle then u have to pay tax
    consult any income tax lawyer for submit ur income tax
    Laora, Jan 27, 2012 IP
  16. kbx911

    kbx911 Peon

    Messages:
    7
    Likes Received:
    0
    Best Answers:
    0
    Trophy Points:
    0
    #16
    yes i am still looking for an answer my ca hadn't heard about the term freelancer and crowdsourcing until i told him
    kbx911, Jan 27, 2012 IP
  17. Deepa7476

    Deepa7476 Active Member

    Messages:
    15
    Likes Received:
    1
    Best Answers:
    0
    Trophy Points:
    58
    Digital Goods:
    1
    #17
    I have a short compilation on "Income Tax for Freelancers, make an informed start" but I am not allowed to upload the pdf here. says File size too large (2780KB)
    Any idea how i can get it up?
    PS: Please run a google search on the title, you can read it online
    Deepa7476, Apr 18, 2013 IP
  18. browntwn

    browntwn Prominent Member

    Messages:
    8,305
    Likes Received:
    831
    Best Answers:
    7
    Trophy Points:
    385
    #18

    I don't think that is a legal question. ;)

    I am not sure anyone is still following the thread since it is old. If so, I guess they can search for your PDF by its title as you suggested.
    browntwn, Apr 18, 2013 IP
  19. FlourishDNA

    FlourishDNA Banned

    Messages:
    41
    Likes Received:
    2
    Best Answers:
    0
    Trophy Points:
    8
    #19
    I have been working as Freelancer from 2005 and earned in a Millions but never had to pay a single tax. I did asked Bank and added PAN number to the bank account.
    FlourishDNA, Apr 19, 2013 IP
  20. boyuancy

    boyuancy Greenhorn

    Messages:
    39
    Likes Received:
    2
    Best Answers:
    0
    Trophy Points:
    18
    #20
    I'm sure that IT laws in India are same for everyone, freelancer or not. And when it comes for someone having to pay taxes, I think it depends on how much you are earning as opposed to how (as long as you aren't slitting throats to do that).

    So, to check weather or not you have to pay taxes, head on over to:

    http://www.incometaxindia.gov.in/

    and click on the 'Tax Calculator' button in the right sidebar. Just put in the total amount that you have earned in the last financial year (I think that's till the end of March) and it will spit out the amount of tax that you'll have to pay.

    As for me, I'm not yet earning enough to have to pay taxes. Anywhere under $200 a month (Rs. 10,000) or $2400 in the financial year and I think we're good.
    boyuancy, Apr 20, 2013 IP