GST and IT for a sole proprietorship under 44ADA

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

Hey Prince, thanks for sharing your detailed situation! Let me break down your questions one by one:

1. GST on Export of Services via Handling Platform (like app.deel.com)

Export of Services under GST requires that the payment be received in convertible foreign exchange OR in INR wherever permitted by RBI.
The key is whether the money you receive in your bank account is considered as payment in foreign exchange or not.

Since your platform (app.deel.com) deducts handling fees in Euros and converts the net amount to INR before crediting your account, this is still considered as export of services because:

The gross amount was received in foreign currency initially by the platform.
You ultimately receive INR, but it is a conversion of foreign exchange received by the platform.
Such platforms are considered intermediaries/payment gateways, and the GST department accepts this as export receipt if you have the relevant foreign remittance certificate (FIRC) or bank statement showing inward remittance.

Recommendation:
Keep proof of inward remittance (FIRC or bank statement), invoice, and contract for export services. You can claim zero-rated GST on export of services.

2. Hiring Family Members as Independent Contractors

You can hire family members as independent contractors for your firm.
However, the payments should be at arm’s length, supported by proper agreements/invoices for services rendered.
The work done (like email handling, coordination) should be real and verifiable.
For Income Tax purposes, if family members receive payments, they should declare this income and pay taxes accordingly.

Tax saving tip:
Hiring family members and paying them for genuine services can help split income and reduce tax burden, but the work must be genuine and documented.

3. First Payment Received Before GST Registration

If you received payment before registering for GST and the total turnover crosses the threshold (₹20 lakh in most states or ₹10 lakh in NE states), you must register for GST and pay GST on supplies made after registration date.
For the payment received before registration date, GST is not applicable, but you should maintain proper records.
This income is still taxable as business income (not income from other sources). You cannot treat it as "other sources" income just because it was received before GST registration.
Regarding 44ADA, since your income is above ₹50 lakh, presumptive scheme doesn't apply and you need to file income tax under normal provisions (maintain books, file return).

Summary:

Query	Answer
Export GST on platform received funds	Considered export if inward remittance proof available; zero-rated GST applicable.
Hiring family as contractors	Allowed, but must be genuine service, documented, and arms-length payment.
Payment before GST registration	No GST on pre-registration income; taxable as business income under normal IT rules.