I am working as a contractor for a company based out of Europe. I provide software consultancy to this company. According to IT portal my work comes under section 44ADA.
The annual contract with this company is Rs. 60 lakh (paid in Euros). I have a couple of questions about taxation. Unfortunately according to IT rules I cannot opt for presumptive tax as the cap is 50LPA.
I see that there is no GST to be paid for export of my service however there is a catch with my payment system. The platform used by the client allows me to pay a handling charge of 50 euros and they give me the money in my account in INR. e.g. they send me 5050 Euros -> app.deel.com charges me 50 euros and converts the remaining 5K euros to INR and sends to my account. I pay very less money compared to what I would have paid if bank would have directly converted it.
The GST rules says that the received income should be in foreign exchange in order to qualify as export. Does use of this platform voids this as money coming to account is in the INR?
Can I hire my family members as independent contractors for my firm? I am planning to ask my Mom and cousins to get on board which will help me save taxes. I anyway send them money and they can do minor work for me like checking my emails, taking to other contractors for my website development etc.
Do I need to prove the IT that they are working for me to a degree X?
Another question I have is that I got my first payment before I registered for GST. Do I need to process this with GST rules or can I simply show this as Income from other sources and pay the standard 30% income tax on this
CAclubindia
