Taxation on google adsense/admob income for app development

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An app developer earning between £20-22 lakh annually from Google AdMob ads within their Play Store apps is seeking clarification on the applicable tax system. They are unsure if presumptive tax schemes like 44AD/44ADA apply or if it should be treated as business income. The developer also inquired about Goods and Services Tax (GST) obligations, specifically regarding whether it's an export of service and zero-rated. Experts suggest opting for ITR 3 and declaring actual expenses rather than presumptive schemes, and indicate no GST is chargeable on this income.

Student

Student (Querist)
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27 June 2023 Hi, I develop mobile apps and submit them in the google playstore thus my annual turnover becomes around 20-22 lakh. The income is fully from google admob (adsense singapore) ads showed inside the apps which are downloadable from playstore. Now for this income which tax system applies, presumptive 44ad/44ada or anything else? Also do I need to pay gst ?
Please expert insights are appreciated.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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27 June 2023 1. Sec. 44ADA it act
2. GST chargeable under RCM, unless google charges under forward charge.

Student

Student (Querist)
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27 June 2023 Dear sir, thank you for the quick reply. I want to say that,
1. There is no professional service given. I am not paid for app development (sale/freelance etc) rather the apps show ads which make the earning, thus shouldn't it be considered business income, 44 ad?
2. Google shows the ads to the viewer and charges gst from the advertisers for the same. Those ad revenue is shared to us by google adsense. Also the supplier of service (google adsense) is based on singapore, is it not an export of service and thus considered zero rated supply. Please clarify.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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27 June 2023 Yes, you may opt for sec. 44AD, but it is trivial issue. Better to declare the income under ITR 3 with actual expenses deducted from the income. No GST on such income charged.

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Student

Student (Querist)
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27 June 2023 Thank you sir for your valuable insights.

Message likes : 1 times

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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27 June 2023 You are welcome.

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