Freelancing - income in foreign currency

1116 views 3 replies

Manu

Developer

25 Points Joined July 2012

I provide software services for foreign clients and receive payment in USD to my personal bank account.

Questions

Do I need to pay Service Tax ?
Do I need to get audited ? (My income is above 10 lakhs)
Do I need to get IEC ?
Are there any FEMA rules I need to be aware of?
Will I come under section 44AD ? Will I come under section 44AD even if I establish a sole propietorship ?
If I come under 44AD I need to pay just 8% of payments as tax ?

Replies (3)

CA. Anuj Gupta

Practices in NRI Int.Tax FEMA TP FD

7024 Points Joined May 2007

Originally posted by : Manu

I provide software services for foreign clients and receive payment in USD to my personal bank account.

Questions

Do I need to pay Service Tax ?

That shall depend on palce of utilisation of services being provided by you.

Do I need to get audited ? (My income is above 10 lakhs)
NO, the benchmark of 15 lakh is on the receipts and not incme.

Do I need to get IEC ?
Answer shall depend on services being provided by you.

Are there any FEMA rules I need to be aware of?
Answer shall depend on services being provided by you.

Will I come under section 44AD ? Will I come under section 44AD even if I establish a sole propietorship ?
Answer shall depend on services being provided by you.

If I come under 44AD I need to pay just 8% of payments as tax ?
Yes, but the answer shall depend on services being provided by you.

Anuj

femaquery @ gmail.com

Manu

Developer

25 Points Joined July 2012

Thanks Anuj.

Type of service: Custom software (web applications) development. Say, building a social network web application like facebook.

Place of Utilization: United States (Not sure how to determine this, but the service is provided to a US based client and they own the software and Intellectual Property. The software is deployed on US & German servers)

I should clarify that the receipts exceed 10 Lakhs (not income). It will exceed 15 Lakhs in the current financial year.