I earn income through ad placements on my websites and affiliate marketing. I've been filing GST return as sole proprietor. I would like to direct ad earnings to my mother's account and continue with affiliate earnings coming into my account. The thought behind this is that both of us can file tax returns independently leading to tax savings. Also, as my income from advertising services is likely to exceed Rs 50 lakhs, this will help me as both of us can come under presumptive taxation scheme. I'm the sole proprietor/owner of these websites. Can I do this in any way while retaining proprietorship?
Yes you can.
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Hi,
Since you are having this business in your name, it is not possible to divert the income to your mother account and save tax just by diverting the income.
For this you need to transfer the business to your mother account and need to pay GST also in her name/firm name as the case may be
Hope I am able to solve your query.
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Thanks & Best regards
CA Shubham Bansal
- Yes it is possible but you have to obtain GST registration also for mother PAN. Also after some time, earnings in the hands of mother will increase and you will again fall into the same situation. It is better to incorporate LLP or company.
Dear Sir,
Hope you are doing well !!
Yes, you can do it subject to certain conditions.
We may assist you in entire planning.
It is advisable to take a phone consultation for detailed discussion.
Hi,
Its not that simple to just get the money in your mother's account as tax officers can clearly understand this tax avoidance technique.
You can do so if your mother has relevant skills to handle this business or you have proper documentation around it.
its better to discuss tax optimisation things over a call b cause it requires too many other details.
Dear Sir,
Though it can be done, please be informed that if the case is selected for scrutiny by the income-tax department, you would need to justify why your mother has been receiving income from websites developed by you. In absence of any proper justification regarding the efforts put by your mother in development/management of website, the arrangement might be treated as sham and the entire income will be made taxable in your hands. Further, there might be penalty implications as well.
I do not wish to discourage you, but the chances of selection of your mother's case for scrutiny would be high because of sudden inflow of huge amount of funds in her bank account.
You may call me on the mobile number mentioned in my profile for a discussion regarding some other methods.
Thanks!
