Tax liability for consultancy services to a foreign company

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This query is : Resolved

Raghavendran S (Querist)

30 August 2012 I am a salaried Indian individual working in a private limited company in Chennai.

I regularly pay income tax and file appropriate returns.

In FY 2012-13, I would like to provide information technology consultancy services in individual capacity to a Canadian company having no branches in India or direct operations in India.

The Canadian company plans to pay to me in USD for the technical consultancy which will be provided over email.

The USD payment is planned to be sent to my Savings Bank account in India through electronic wire transfer.

The income will not be regular and may not exceed 2 lakhs per financial year. I am currently in 20% tax slab.

In this regard I would like to clarify if the above income will come under the purview of Income Tax in India?

How should this income be treated as per income tax rules prevalent in India.

Regards
S.Raghavendran

Arihanth Jain

Arihanth Jain (Expert)

31 August 2012 Income will be taxable.

Raghavendran S

Raghavendran S (Querist)

31 August 2012 Thanks Arihant,
Can you tell me how this income should be treated? Should I show the income under "Income from other sources" while filing ITR-1 next year? or should I pay any advance tax? or use a different form to file this income?

Arihanth Jain

Arihanth Jain (Expert)

31 August 2012 ITR 4 - Professional income seems apt.

Message likes : 1 times

Raghavendran S

Raghavendran S (Querist)

01 September 2012 Arihanth, Should I file both ITR-1 and ITR-4 next year since I am also employed in a private limited company? Should I pay advance tax on the income? Can I claim any exemptions on the income earned? Will FEMA apply?

Praveen Kumar Rathi

Praveen Kumar Rathi (Expert)

01 September 2012 you should file ITR 4 only and give the detail of your both sources of income in respective place.

If you incurred any expenditure for providing these services then claim the expenditure against that income.

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