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Foreign income for online work for a resident indian

Harsha (Software professional) (214 Points)

29 August 2015

Dear Experts,

If a resident Indian earns any income through any online work (online surveys, freelancing, small outsourced work or software service etc), under what category does the income come? Please note that the individual is NOT an employee of any company but earns in individual capacity. Should this be treated as 'Foreign income' or just 'income from other sources'

Also is it Form 4 (profession) or just Form 2?

Regards,

Harsha Vardhana R

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5 Replies

Udgam Koomar (Tax Technologist) (1949 Points)
Replied 29 August 2015

I think since you are using your professional knowledge to earn money, you should use ITR4 where you can claim certain expenses also. Wait for others opinion.

1 Like

Harsha (Software professional) (214 Points)
Replied 29 August 2015

Sure. I would wait for other's advices

Prasanth (Entrepreneur) (58 Points)
Replied 30 August 2015

Me too have some doubts regarding the income from online business. In my case it is business only, not professional income. But me too have the same doubt regarding the "income from outside india" part!

I'm running an online business(websites) and I'm getting income from US/UK online marketing companies. I'm getting payments through PayPal as well as direct remittance to my SB account. My income comes under presumptive business(44AD).

Now I have a doubt, whether my income should be considered as foreign income? As per AY2015-16 ITR4S eligibility terms, (Sugam) cannot be filed by individual who has earned any income from source outside India.

This article written by a CA says the income from Google Adsense is not foreign income: https://www.moneycontrol.com/news/tax/understanding-foreign-incomea-resident-tax-payer_2571021.H T M L

So, I got confused. ITR4 or ITR4s?

1 Like

Harsha (Software professional) (214 Points)
Replied 31 August 2015

Thank you, Prashanth. You provided a lot of good pointers.

Anyway, I have filed for this AY 15-16 and would like to this aspect for future. If it is just "income from other sources", I believe just ITR 2 would be fine.

We would await for further guidance from experts who would be relaxed after 31-Aug

NaviN (Consultant) (120 Points)
Replied 24 November 2023

Just to provide an answer for anyone who comes across this question: From my understanding, for the kind of work that Harsha (OP) mentioned, it would be 44ADA, and filing would be done in ITR3. It would be foreign income and filled in schedule FSI. A CA would provide more pointers on which sections and fields to enter the information. However, from the information on this page and this page, there's some clarity that needs to be improved about income earned abroad and payable in India.