Contract with US Company

1. Income tax is payable on the net profit. It seems that the contract is related to the independent personal services. If you are working as an IT professional or other specified professional, you are required to maintain the books of accounts and get them audited. If you are working as a non-specified professional, you can take the benefit of presumptive taxation scheme u/s 44AD up to gross receipts of INR 2 CR.

2. As it is an independent personal services, status of individual will be considered and benefit of tax slabs will be applicable.

3. It seems that it is an export of services. You are required to obtain GST registration once the gross receipts exceeds Rs. 20 lacs. Apply LUT after obtaining GST registration for exports without payment of taxes. Entire process is online. File the GST returns quarterly. Collect and retain FIRC from banks for foreign inward remittances to take the benefit of exports.

You may consult telephonically for further discussion.

-If you are a resident it will be taxable in India else not. You may file your return under presumptive taxation scheme.

-Sole proprietor and individual are same. Sole proprietorship is taxed as individual only.

-You need to apply for GST. if you are receiving payments in foreign currency you will be covered under export of services and need not pay GST after filing LUT for export. But returns are to be filed.

1. The manner in which you get the payment will not decide your income tax. However, from GST perspective, it's important that you receive the money in foreign currency and get the Firc from your bank/paypal.

2. We can discuss this over a call as this has to be an interactive conversation to give you the best answer depending upon your preference and other things.

3. There will not be any difference.

Hello,

1. From the GST perspective, the payment should be received in convertible foreign currency so that it becomes eligible for the export of services without payment of GST. 

2. Both are taxed similarly on a slab basis.

3. GST system is similar for any type of assessee. Important is that you receive convertible foreign currency and have FIRC for the same. This way you would be able to provide these export services without payment of GST under LUT. 

For a detailed resolution of your query, you can contact us directly or take a phone consultation.

Regards,

CA Hunny Badlani