• Consultant - Tax Details

Hi, I am a Citizen of Singapore working full time in India from 2012 as Executive Director in a multi national Engineering Consultant organization. Being an Expat my Tax is being paid by the company. This December i will be completing 70 years and from 1st January 2021, I am converting my full time job to 50% of the time and hence i will be considered as Sub-Consultant. 
My salary will be paid at the rate of US$ 835 per day and for 11 working days it will be 835 x 11 = US$ 9185 per month exclusive of GST. I will be paying the Income tax in India since i will be in India for > 180 days.
Please let me know the Tax Calculations which i had to make. I also have an option to continue as an Employee of the company with 50% time. In both the options i need to pay the Income by myself. I require your advice so that i could select which is the best method for me.

Thanking you
Regards
H.Seetharaman
Asked 5 months ago in Income Tax

Dear Sir,

 

Hope you are doing well !!

 

You can take the benefit of presumptive taxation scheme u/s 44ada.

 

The Income of any person making use of this Section would be assumed to be 50% of the total Gross Receipts for the year.

 

So, you need to pay tax only on 50% of total receipts.

 

We may assist you in Tax planning and entire procedure.

 

It is advisable to take a phone consultation for detailed discussion.

 

Payal Chhajed
CA, Mumbai
5077 Answers
152 Consultations

5.0 on 5.0

Dear Sir,

 

For professionals, the option to choose presumptive taxation scheme under section 44ADA is available, wherein, only 50% of the gross receipts is considered as taxable profit. However, the scheme is available only if the total gross receipts during the year does not exceed Rs. 50 lakhs. In your case, the gross receipts would exceed Rs. 50 lakhs and thus, presumptive taxation scheme would not be available.

 

Anyways, if you choose to work as a professional consultant, it would be better since you would be able to claim the deduction of expenses incurred for the purpose of profession and thus, you would be paying less tax as compared to getting the same income in the form of salary. You would be required to get your books of accounts audited from a CA if you choose to work as a consultant, since your gross receipts would be exceeding Rs. 50 lakhs.

(An example of expense which can be claimed as a deduction- A proportion of rent paid for your home, which can be said to be attributable to your home office from where you would be conducting your profession.)

 

With some planning, the tax liability can be substantially reduced. There are other ways through which the benefit of presumptive taxation under section 44ADA can be availed even if the gross receipts exceed Rs. 50 lakhs. For a detailed discussion regarding the same, you may contact me on "Eight Nine Seven Six Six Three Nine Two Nine Four". 

 

Thank you.

 

 

Yogesh Malpani
CA, Mumbai
49 Answers
6 Consultations

5.0 on 5.0

You would be completing 70 years means your age would be 70+?

Plus were you till date filing your return of income?

If you are going to work as consultant then in that case you need to take GST otherwise not.

Plus if you work as professional you can show some expense against the income.

So there are various if and but. Hence it would be better if you book phone consultation.

 

Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement. You can even book phone consultation for further personal assistance.

Thank you.

Naman Maloo
CA, Jaipur
3791 Answers
45 Consultations

5.0 on 5.0

- It is advisable to opt income as consultant instead of salary. 

- You can opt for presumptive taxation scheme under Income tax. It is better to consult practicing CA who can advise you properly. 

 

- GST registration will be mandatory if the gross receipts will cross Rs.20 lacs per year. Services provided by you from India to foreign company is treated as export of services under GST. You can export without payment of GST subject to application of LUT.

Vivek Kumar Arora
CA, Delhi
4063 Answers
338 Consultations

5.0 on 5.0

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