Hello everyone.
I am a webmaster earning decent income from my websites for the past one year.
Previously as a govt employee, I used to submit my income tax return as usual along with form 16 with the tax deducted at source.
Now I have earned around Rs. 5 lakhs from my websites using adsense and affiliate programs in the year 2006-7. The payments include cheques in US dollars, bank transfers and cheques in indian rupees from Google and paypal, most of the earnings are advertising revenues from US based companies.
I have a few questions regarding how I should go about with my income tax. I am thoroughly confused as have no prior experience.
1) Should I pay tax for the entire income? Are there any exemptions on foreign income?
2) Can I just show the entire income as "Website Income" in the return? Should I need to show any proof and if yes, what?
3) Can I claim tax exemption for my expenses for running the website including hosting fees and money spent for purchasing or upgrading computers? Should I need to show any proof for this?
4) When should I pay the tax? My friend told me that today, March 15, is the last date for paying income tax. Can I pay the same later and if so, is there any fine?
Answers would be greatly appreciated
Dear,
1)You have to pay tax on entire income i.e.Rs.5 lacs.No there is no exemption on foreign Income.If you are Non resident and income is accrued and received outside India then it is not taxable in India.Otherwise it is Taxable.
2)You can Show website Income as professional receipts and Income and Expenditure can be prepared, in which Website income can be in Income side while any expenditure for preparing website i.e expenses for running and hosting fees(as you said) can be shown on Expenditure side. Net Income(Income-Expenditure) is Taxable as Income Under Head "Income from business and Proffession"
3)You have to maintain Receipts and bills of such exepenses.
4)You have to pay Advance Tax by 15th March. But you can pay tax by 31st July by Penal Interest of 1% on Tax Amount.You have to submit Income tax return by 31st July 2007.If your Professional receipts i.e. Website receipts exceeds Rs.10 Lacs you have get your books of account audited from C.A.
CAclubindia
