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Tax consequence

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Subhojit Bhakat

B.Com

120 Points Posted on 02 June 2021

Some Consideration received from UNITED KINGDOM TO INDIA , for providing management services .

The services are provided by two individuals(both are resident of India).

The foreign client want to send the whole amount to the bank of one individual only .

Then the individual has to send the 50%amount to the other individual by using banking NEFT.

SO , the question is the whole amount will be taxable in the hands of such individual who receives the amount?

Replies (5)

Quick Summary

This discussion explores the tax consequences for two Indian residents providing management services to a UK client. The core issue is how the receipt of the full payment into one individual's account, followed by a transfer to the other, affects taxability. It's suggested that proving the service was a joint effort and the client's refusal to pay into separate accounts is crucial for demonstrating the split tax liability. Opening a joint account is also proposed as a solution.

Income Tax Wala: (Fin. Expert)

Chartered Accountants

2015 Points Posted on 02 June 2021

It depends on situations and documents.

you have to prove to Income Tax Department that you both guys provided the services to foreign client and that foreign client refuse to pay in both the accounts. Due to that refusal, you took the entire amount in one account then transfer 50% to another account through neft or any banking mode.