Salary vs professional fees

as a professional professional fess are always better 

Suppose ur Prof fees are 20lk.  Net will be 16.95 lk and rest 3.05 will be GST.

suppose u dont have deductions then tax on 847500 will be 82000

Salary of 20lk with no deduction, Tax  will be 412500.

So professional fees --> GST 305000   plus Income tax  82000 = 387000

Salary  total income tax  =412500.

A gain of 25500.

Better ask for Professional fees with GST paid by them. They can take credit.

.

One of my client agreed to pay professional fees  plus GST.

Now one client is adamant.  it appears i have to absorb GST

Thanks anyway

No other option but to tell him the benefits of GST.  He must be receiving GST from other clients. While paying their GST this can be deducted.

will suggest ->need to share GST 50-50 .

Thanks all

@ Kiran  You have given example for 20 lk . But the truth is  upto 16lk Salary tax is less.

See the attached XL sheet.  At a certain point both Salary and Professional receipt tax exactly matches. Moreover there are receipts from other clients. So the tax difference may be more if the receipt from that client is clubbed with other client.

@ shiroor  Cant distinguish between first 16lakhs where  only 6 lakhs is subjected to 30% tax AND

last 16 lakhs where all 16 lk is subject to 30% Tax. The difference between Salary Tax and Prof tax is going to remain same.

@ shiroor thanks for XL sheet. It needs further enhancement. Total sum of other clients can be added and other one is ratio of GST shared is important.

This XL sheet is for 100% GST to be absorb by me.

If fifty % is taken  0.5 * 0.1525 will be GST paid by me.    

And one more thing in business u can claim other deduction also also

if  not go with 44 ada for 44ada fees taken as 44 ada better 

@ samir    in 44ADA  - all expenses are deemed to be taken in 50% profit.

Other deductions in Chapter VIA is common to both Salary and Prof fees.

@ samir yes true.   Other deductions, loss from House property and income from other sources and clients will be common to both sides - Salary and Professional income. Hence ommited for simplicity.