Hello Friends, I am glad to be back in the forum. I have just come back from a long leave. This question is only for Indian friends. I mean it is not relevant to people of any other country. I have been into regular service since last 16 years. My salary (not worth mentioning) did not require me to bother anything about taxes. Off late, I have quit my regular job and have been doing contract work for foreign clients. I got my PAN card last year and have filed NIL returns for the year 2006-2007 as I crossed mariginally the benchmark of Rs. 100000/- from IT dept, India. There was TDS from my previous employer whom I worked for one year. Now I am on my own. That is I am not into regular service at all. I do freelancing jobs. Luckily, this year looks promising and there are very chances I may cross the benchmark once again. But as I have no one to look forward to take care of IT returns, I thought this is the best forum to take valuable advice from experts here. My queries are: 1) If someone could provide me with basic IT rules regarding as to what is the amount above which I am liable to pay tax etc. 2) What are investments options available in terms of tax benefit. I know some of them like PPF, Medical Insurance, Mutual Funds ( I dont know whether each and every Mutual Fund is acceptable), LIC etc... 3) Am I liable to pay tax if I earned from a foreign employer who is awarding some contract or freelancing jobs to me. 4) I live in joint family with my parents. I have so far not differentiated my earnings and my father's earnings. He is a senior citizen and I hand over all the amount earned by me to him. I mean is there special rules for this.. like HUF... Do I have take into account of the total earnings of myself and my father for the year 2007-2008. I mean are there any better options ....i dont know actually. 5) What other factors I should take care so as to maximise my investment and pay less tax. Do I have to account for any expenditures like Internet charges, administrative expenses etc since I am working from my home only. 6) What is the benchmark from where tax paying becomes inevitable? I am sure I may not get into that stage this year.. but it is better to know. 7) Any website links where I can study the above factors. The IT website from government of India is too complicated for normal layman to understand. 8) So far, I am getting all the amount earned from the foreign client to my Savings bank account. Is this ok or do i need to open a current account in some firm or my name. Please advise... 9) Please note my income is not steady, I may end up in nothing , something or everything in years to come. I may even switch of to regular job later on or start some other business...I dont know...Right now I am only exploring various opportunities.... I know this query is long. But the person who knows tax issues can explain in brief as my question is more or less centered about basic tax rules. I am sorry, I am quite naive in this as I never had an opportunity to think before this issue as my income was too low to bother. Looking forward for your valuable advice and suggestions.... Thank you Regards gopal
divide the income in seperate accounts, show more expences. u can put around 80,000rs in PPF u can invest in gov securities and bonds (buy tax saving bonds)
You are eligible for tax pay even ur income is foreign. You seems to be more conscious about taxes and benefits. I suggest you to hire a CA or accountant to manage ur accounts and advice you. Typically a CA charges around 10000 / Annual & Accountant charges half of it. CA is the best if you can afford him in stating stage. Goodluck.
Forumrating: Thank you for your valuable suggestions. E-Indiaweb: Yes, you are right. I am conscious about taxes that is because, I have just started something of my own and I dont want to repent and enter into controvosies later. I did contact one CA not because I can afford one, as my income has just started. However, being in semi-urban city, I found out most CAs doesnt have any idea about foreign income. Hence I thought this is the best place to ask advice. Thank you for your advice. Regards gopal