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
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Tax Treatment:
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How will this income be taxed? Will it be considered under “Profits and Gains of Business or Profession”?
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What expenses can I legally claim as deductions to reduce my taxable income?
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GST Registration:
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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?
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Will I be able to claim input credit on business-related expenses?
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Compliance Requirements:
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Advance tax, GST returns, and type of ITR applicable.
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Whether I will need to maintain detailed books of accounts or undergo a tax audit.
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Tax Planning / Benefits:
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Possibility of optimizing tax outflow through expenses, insurance, or other eligible deductions.
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Whether operating as a proprietorship is sufficient, or if I should consider incorporating a company/LLP for this engagement.
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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.
CAclubindia
