I am currently employed in a private company with an annual salary of approximately ₹20 lakhs. I have recently received an offer for a 1-year contractual role with professional fees of around ₹50 lakhs per annum. Since this would no longer be considered salary income, I wanted your guidance on the following points:

Company is located outside of india with 5000 USD per month

  1. Tax Treatment:

    • How will this income be taxed? Will it be considered under “Profits and Gains of Business or Profession”?

    • What expenses can I legally claim as deductions to reduce my taxable income?

  2. GST Registration:

    • Since annual professional receipts exceed ₹20 lakhs, I understand GST registration is mandatory. Could you confirm if I will need to charge 18% GST on invoices?

    • Will I be able to claim input credit on business-related expenses?

  3. Compliance Requirements:

    • Advance tax, GST returns, and type of ITR applicable.

    • Whether I will need to maintain detailed books of accounts or undergo a tax audit.

  4. Tax Planning / Benefits:

    • Possibility of optimizing tax outflow through expenses, insurance, or other eligible deductions.

    • Whether operating as a proprietorship is sufficient, or if I should consider incorporating a company/LLP for this engagement.

I would appreciate your advice on the most tax-efficient and compliant structure for this transition. Please also let me know your professional charges for handling GST registration, return filing, and income tax compliance in case I decide to proceed.