Paypal and Income Tax India

yup , some half amount of 3yrs or something..papa tried to explain , it went over my head....

 

im really hoping someone compile a writeup on this one like a wiki or something which everyone can refer to ... basic atleast, for freelancers working off the net,...

M.


EDIT: a little over my head, and i actually fell sleepy by the end of it, but id like to share, uploaded Jan 2009, so i think relevent, comment if u understand!

 

Thanks for sharing your views.

I have bought some domains and web hosting last year and i paid via Paypal. So how i can show the amount as investment because I am not providing Paypal receipt.

 

Well you can show your rents like electricity bills, Mobile phone , home rent or more but I don't think you can show bills to web hosting

Mine cousin brother is CA and when I asked him about Tax saving plans then he simply reply if you paid about 5 or 6k per year to government then what's the issue for you this is 500 per month( 8 beer bottles) if you think .


If your do all transaction in Saving bank account then no need to worry as in personal account's you can do 10 lakh per year transaction.

But for safer side we have to pay Tax

As Don said do little investment in SIP, FD's and many more there you can get about 100% deduction in Tax

 

You can open PPF account at selected State banks and Post Offices.

 

Yeah that's why I submit 3 times tax in a year

 

Most of the People who are self employed like those who have webhosting service need to file taxes under ITR-4 currently the slab for salaried people is of Rs 160000 so if you have more income than that personal tax will be at 10% till Rs 3 lacs so approx 13900 tax without any saving so you can show different expenses etc to cover it up and it will be much lesser.
Remember currently for most Salaried people taxes are cut monthly If you pay advance tax you will get some refund for that.

For businesses the taxation is all together different

 

Can I show my family members as my employee?

 

I think you can pay tax at any time for the current financial year. If you're paying Advance Income Tax, then you can pay in various installments.

 

Not a worry ... for a homemaker it doesn't matter

One more ... last year i forgot to file return can I do it now for that year?

 

You can submit tax for 2008-2009 before march 2010..i submitted 2 days ago and had to pay 1.8k extra as fees..

 

thanks guys for contributing in this thread...

Well another question is coming in my mind. We are providing web related services. So we need to submit service tax too??

 

Calculate all income (Gross Income) in the financial year and then subtract all expenditure related in order gain that income, and you will have your Net Income for the year.

E.g. you are a content writer:

Income from various sources

Paypal - INR 4,00,000/ pa.
Indian bank deposit - INR 2,00,000/

The gross income is INR 4,00,000 + 2,00,000 = INR6,00,000/-

Expenditure related to a writer:

Electricity - 12,000/-pa
Telephone - 15,000/pa
Broadband connection - 12,000/- pa
PC maintenance - 10,000/- pa
Books, magazines etc. - 10,000/- pa
Fees to your writer/editor/proofreader - 3 persons @Rs 7,000pm x 12 = INR252,000
Misc. Expenses - Rs10,000/- pm

Thus total expenditure towards your profession is Rs.3,21,000/-

Net income = Gross income - expenditure

Net income = 6,00,000/- - 3,21,000/- = INR2,79,000/-


Now, you will fall within the 3 lacs income tax slab which is 10%.

ie. tax free income for Indian male below 60 yrs is Rs.1,60,000/- pa

Thus your taxable income becomes INR2,79,000/- - INR1,60,000/- = INR1,19,000/-

And tax payable is INR1,19,000 x 10% = That is 11,900/-

Now if you have investment, savings etc. you can get more deduction on tax. And it is advisable to keep bills, vouchers, cheques etc. ie. details of every payment you made, in case you need to produce it. And if you are paying your employees, its better to pay them in cheque or through fund transfer.

PS: I am not a tax professional.

 

Do we get return file even if we have more income than 1.6lakh but that is used somewhere. Which means I am not paying any tax but showing it as white money to govt.

- Mr.President -

 

What do you mean by used somewhere?

 

I mean used in things which Govt. doesn't counts as payable. Like in LIC premiums or etc.

- Mr.President -

 

Yeah those will be like your expenditure I suppose and you will get tax rebates too I guess.

And women and senior citizens get higher rebates on tax, so if possible all financial transactions can be done on their behalf. However, this might be unethical but not illegal.

 

Nope Lic premium also deduct from your income and you get Rebate in Tax.

To all these we can get discount:

* PPF
* ELSS - Mutual Funds
* NSC
* KVP
* Life Insurance
* Post Office Time Deposit Account
* Interest paid on housing loan for self-occupied house property
* Medical insurance premium
* Expenses for medical treatment