Income tax

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

02 February 2016 Hello Experts,

I would like to know about taxability in case of following:

My client (Resident Indian) is doing free lancing work (basically of designing) through a free lancing web site. His clientele covers all over the world but the work is done in India and the Income is also received in his Indian account. I have following questions:

1. Whether the income will be treated as Business Income or Other Income?
2. At what rates taxes shall be charged, normal rates or Foreign Income?
3. Can all the expenses can be claimed? It can be taxed under 44AD in presumptive taxation or not?
4. Whether any other tax liability will arise since the income is from outside India?

Please its very urgent. Thank you so much for your time.

Regards

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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02 February 2016 1 It is a professional income.
2 Tax will be charged at normal rates.
3 All expenses can be claimed. As it is a professional income not covered under 44AD.
4 No other tax liability.

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Querist : Anonymous

Querist : Anonymous (Querist)

04 October 2016 Thank you so much for your reply sir. I have another question related to this:
Wife is using paypal to transfer the earnings of this income and in paypal account husband's PAN is provided. However the earnings are transfered to a joint Bank account held by husband and wife. Whether it will be okay to treat it as wife's income?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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04 October 2016 Yes it is okay but change the PAN provided to paypal.

Querist : Anonymous

Querist : Anonymous (Querist)

04 October 2016 Thank you so much. Paypal doesnt provide option to change the PAN but the account is only treated for transfering the income. Is it okay? whether it will create troubles in future if income is treated as wife's income?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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04 October 2016 Yes IT dept may raise quries. So open an another paypal account by giving PAN of wife.

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