Taxability under head

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Vinit (Querist)

09 April 2018 Hi,

I have a query regarding the head of income for an Individual.

If a person is hired by a foreign company in China having no establishment in India(No Pan, No Tan etc), and if an agreement is being signed under the head of "Employment Contract" and is hired on a contract of 3 years which is stated in the contract. The person would be working in India for the Company.
Based on this information, what would be the head under which we should consider this Income, Salary (based on the fact that it is an Employment Contract) or Professional Income (based on it being a 3 year contract)

Thank you in advance

CA Suresh Jain

CA Suresh Jain (Expert)

09 April 2018 It is qualified as a Contract for employment. The fixed term of 3 years does not make a difference.

Vinit

Vinit (Querist)

09 April 2018 So the return would be filed under ITR 1 or 2 depending on other income but if there is no TDS being paid by the employer, Would the individual be required to pay Advance Tax as per the rules during the 2nd 3rd and 4th Qtr.?
Also, can the individual claim HRA even if he has no defined Salary Structure?

Nikhil Kaushik

Nikhil Kaushik (Expert)

09 April 2018 a lot of people report such incomes as professional income. though it adds to higher indirect tax compliance, it is much easy on taxes.

Message likes : 1 times

RAJA P M

RAJA P M (Expert)

09 April 2018 @ Vinit.,

Pls give some extra clarity about the contract. Bcoz, If you are acting as Employee or Contractor or anything. But, What is the nature of activities and works...?
If you give more details then you can get exact solutions from Our CCI experts....

Vinit

Vinit (Querist)

09 April 2018 @Nikhil Sir,

Indirect tax compliance would still be less if the annual fees does not exceed 20 Lakhs and still would have very less charge if we go for the composite scheme.
But the issue is whether there is any clarity in the law for this case or can we just consider this as per individual case based on the Contract with the Company.

Vinit

Vinit (Querist)

09 April 2018 @ Raja Sir,

Details of the contract cannot be shared but there is mention of Employment Contract as the cover page and the details of fee paid is a fixed amount with no deductions (Lumpsum, each month). This seems like a bit of a grey area but wanted to confirm if we can take this as either or would it be better to just take it as Salary Income only? As there is no Salary Structure, there was a bit more confusion in that regard.

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