• TIN number for a service based online business

Hi,

I am a web developer and want to open an online web development agency.

Do i need a TIN, VAT, or a service tax number to formally create that business. I am thinking to open it as a proprietorship for now.

So what documents do i need so that i am seen as a professional business.? Also i do have clients outside India also, how does that factor into all of this?

Thank you.
Asked 9 days ago in Service Tax from BHOPAL, Madhya Pradesh

Hi,

- GST will be applicable to you once you cross the threshold limit of Rs.20 lacs. At the time of registration, apply for LUT due to export of services.

 

- TIN is required for tax deduction on some expenses which will be required once you will be liable for tax audit.

 

- VAT and Service tax is not applicable.

Thanks

Vivek Kumar Arora
CA, Delhi
1858 Answers
63 Consultations

5.0 on 5.0

Hi,

- As you are beginner, it is advised to start as proprietorship as registering company involves cost at the time of registration and annual compliances along with regulatory compliances.

 

- Maintain separate current account for this business. Being a proprietor, you will be liable to income tax as per slab rate and not 30% flat rate. In case of company it is 30% flat rate.

 

- You will be liable to tax on net profit and not on turnover.

 

Thanks

Vivek Kumar Arora
CA, Delhi
1858 Answers
63 Consultations

5.0 on 5.0

Hi,

 

Hope you are doing well !!

 

1. Under GST rules and regulations of India, all the businesses whose annual sales turnover exceeds 20 Lakhs have to get registered under GST as per the GST registration rules.

 

2.  Yes, you are thinking right. Better to start it as a sole proprietor.

 

3. TIN is compulsory. It is required by all business companies to mention the Tax Identification Number on their official documents such as quotation price, invoice, sales orders etc.

 

3. VAT & Service Tax is not applicable.

Payal Chhajed
CA, Mumbai
1266 Answers
9 Consultations

4.8 on 5.0

It's better if you keep your personal transactions and business with a hands distance.

So I prefer you to open a current account, which is not that much of a hurdle.

Opening current account will help you raise bank finance and avoid tax queries in later periods.

It will also help you to expand your business if so you plan to without much hassles.

 

As a sole proprietor, you will be liable to pay income tax as per your slab rate.

30% is applicable for companies.

Payal Chhajed
CA, Mumbai
1266 Answers
9 Consultations

4.8 on 5.0

Hi

 

You need to register under GST once your turnover reaches 20 lacs.

It is best to work as a sold proprietorship concern in your case.

You don't require VAT/ service tax / TIN registration.

You will need to get a TAN for deducting TDS, if any, if your accounts get audited.

Lakshita Bhandari
CA, Mumbai
2396 Answers
88 Consultations

5.0 on 5.0

For tax purposes, current account is not mandatory. But it is advisable to get a current account. That would do better with the international payment gateways too.

You won't be chargeable to tax for @30%.

You may opt for presumptive taxation under section 44ADA whereby 50% of your gross receipts shall be considered as income. Such income, then, shall be taxable according to tax slab rates.

Lakshita Bhandari
CA, Mumbai
2396 Answers
88 Consultations

5.0 on 5.0

Hi,

 

1. A business whose aggregate turnover in a financial year exceeds Rs 20 lakhs has to mandatorily register under Goods and Services Tax

 

2. Sole proprietorship is best for you.

 

 

3. No requirement of VAT/Service Tax registration.

 

4. TAN registration is required.

 

 

Karishma Chhajer
CA, Jodhpur
741 Answers
4 Consultations

5.0 on 5.0

If you are doing an online business you just need to have a Pan to file an income tax return if your income is above taxable limit. You would require GST number if your total receipt is above 20 lakh a year.

It's necessary to have current account if you are thinking of serious business because current account makes transaction easy but that doesn't simply means that you need to pay 30% tax. That's a wrong piece of information you have received. The tax slab are decided on the basis of your income, so don't worry go ahead open a proprietary concern there are not must formalities as such.

Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.

Thank you

Naman Maloo
CA, Jaipur
694 Answers
5 Consultations

5.0 on 5.0

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