I work from home as a software professional for a US company with no presence in India. I work from home by VPNing into US network.My salary is deposited in a foreign account and obviously the pay slip I receive is invalid in India. I get no deduction of any kind. Can I file income tax as consultant under section 44d of income tax act.
Hi
Is it in the form of salary or consultancy fees.
If it is a salary agreement, income has to be shown under the head Salaries.
If it is a consultancy agreement, income can be shown under presumptive taxation section 44ADA subject to the specified conditions therein.
I am receiving a payslip ( US payslip) but I am not sure of any agreement. Since they do not operate in India they do not give me form 16 or give me any deductions such as HRA or charge professional tax.They do not have any permanent establishment in India. I work remotely from my home and arrange for travel, internet and other expenses. So I am not sure what to do in this regard. Plase help
Is your contract as a professional with fix pay or you are hired on salary basis?
If it's salary income you need to show it under salary and if it's professional fee show it under presumptive taxation 44ADA.
None of the alternative can help you show less income then what you have earned. So it's better to represent the head properly.
Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.
Thank you
If it's in the form of salary, you need to report it as salary only in Indian income tax return.
Your employer must be deducting some taxes in US. Check the same with your employer. You can claim credit of such taxes paid in US while filing income tax returns in India.
Hi,
- If you are receiving payslip then definitely it is a salary and you are working on the payroll of the company. Please check with your employer in respect of any witholding tax deduction. If no tax deduction was made then you may claim it under 44ADA. Going forward, draft an agreement with them for the same.
Thanks
I worked for this company in USA for 2.5 years and then I came back to India and working for the same company. I get a fix pay and a payslip with no USA tax deductions, no Indian tax deductions and no form 16. I get no employer benefits of the company USA employees are eligible for. I just get a fixed amount every 15 days when am working. It is mentioned regular pay in the payslip. Nothing more. Will it be illegal for me to claim under 44DA and why ?
Technically it's in the nature of just a payment for the services you provide, you get a payslip and so from that perspective you need to file return as salary income.
Hi,
Yes you can file the taxes in India under section 44ADA claiming exemption under professional category but only if you keep a copy of the agreement where in i is mentioned that you are not a full time employee instead you are on the role of a consultant or a service provider for which you raise bills.
Thanks
Damini
If there's no contract/agreement, it is advisable to get one agreement executed at first. It could be clearly specified in the contract that you are receiving a consultancy/ professional fees.
Since there are no deductions also, keeping in view that the above agreement/contract is entered into, you may claim benefit of presumptive taxation scheme under section 44ADA wherein 50% of your gross receipts are presumed to be income and remaining 50% as expenses.
44ADA covers the following professions:
Since you are technical software service provider you can very well cover yourself under section 44ADA. & consider 50% as your net Income.
You can claim Section 80GG instead of HRA. & other section 80C deduction.
& No it wont be illegal for you to go for section 44ada since you do get qualified under the heading of Technical Consultant.
Hi,
Hope you are doing well !!
As per my understanding, the fees being received by you from the company is in the nature of professional fees and not salary.
You can take the benefit of presumptive taxation scheme u/s 44ada.
It is advisable to execute proper agreement specified that you are working as a consultant .
Hello,
From the information shared by you in your last query, it seems that you are not an employee of the company.
So you can file your income as professional income under Sec. 44ADA and use the presumptive taxation scheme.
I hope this answer satisfies your requirement.
Regards,
CA Hunny Badlani
