Let say Ram worked as (software engineer) freelancer for a company situated in London from June 2017 - March 2018 from india. At the time he worked alone on that project and was good at it. And his contract was that he get paid only after his project completion. so his project completed in March 2018.
Now he going to be paid by his employer but before that he decided to form a Private limited company in India with 3 directors and told his employer he transfer that money to his company bank account in India.
Is it possible?
If yes then in which category will it be recorded in account?
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company Account
Replies (2)
Instead of transferring money to company bank account Ram shall transfer such money to its private account and then to company account. And in consideration Ram will buy shares of such company.
Ram is working as freelancer and not as an EMPLOYEE.
In case the payment is made to the company then the nature of service provided by RAM is professional service.
This would be liable to TDS under section 194 J and the company will record it as Revenue from operation.
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