Tax and GST on foreign income

Yes, you need to register under GST. However,  GST for your prescribed service is zero rated., hence no tax liability will be there, subject to certain compliance to be done 

Under Income tax, determination of taxable income and tax liability depends on the residential status of an individual during a previous financial year. Assuming your residential status as ROR (i.e. ordinary resident), Indian and foreign income would be determined and accordingly the tax liability. The income earned during a previous financial year would be determined under the head 'Income from Business/Profession". You can avail the benefit of presumptive taxation subject to the fulfillment of conditions mentioned under the relevant section of the Act. Pay Advance tax timely to save interest outflow. Tax would be determined on the basis of slab rates.     

Under GST, it is an export of services subject to the fulfillment of certain conditions. Export of services are treated as zero-rated supply of services. You are liable to obtain GST registration if aggregate turnover crosses the threshold limit and file returns periodically. File LUT (i.e. letter of undertaking) to obtain the benefit of zero-rated supply of services. You can also claim refund of ITC on eligible inputs. Raise invoices as per the contract of employment.

For detailed discussion you may opt for phone consultation

Yes, both Income Tax and GST compliances are applicable to you as explained below

GST Compliance:
As you are getting paid on hourly basis & working as Freelancer,  you need to  take registration under GST if your Gross Receipts (Total of Invoices raised by you to Foreign company exceeds Rs.20 lakhs (GST limit on services for Maharashtra ). Services provided outside India are considered as Export of services under GST which are Zero rated, It means you need not to pay GST on your services. For this you have to file LUT for each financial year to export services without payment of IGST & mention in each of your invoices "Export of services under LUT without payment of GST". You can claim refund of ITC on eligible inputs and input services related to your exports.

Further, You must obtain FIRC to prove that amount is received for Export of services . You have to do regular GST compliance i.e.  GSTR-1 (monthly or quarterly) and GSTR-3B. Even with zero tax, NIL return must be filed

Income Tax Compliance :

Taxability  of foreign income in India is determined by Residential status under Income Tax. As you are living in India for last few years, So Being a Resident of India , You are required to pay Income Tax on your Global income in India.
Hence your Freelancing Income is taxable under the Business & Profession Head under Income Tax. You are required to file Income Tax in India for each Financial year. If Germany has deducted any tax (e.g., withholding), you can claim Foreign Tax Credit (FTC) in India under DTAA (India–Germany treaty).But if the payment is received in your German account and no tax is deducted there (common for freelancers), then only India taxes it. 

As a resident in India, you must pay income tax on your global freelance income, including payments received in your German bank account. For GST, if your annual turnover from freelancing exceeds ₹20 lakh, you need GST registration. Your services to the foreign company qualify as export of services, which are zero-rated under GST, meaning no GST is payable if you comply by filing a Letter of Undertaking (LUT), issuing proper invoices, and filing GST returns regularly. You can also claim input tax credits and refunds related to your export services. Maintain Foreign Inward Remittance Certificate (FIRC) as proof of export payment. If any tax is deducted in Germany, you can claim Foreign Tax Credit under the India-Germany DTAA to avoid double taxation.

This ensures compliance with both income tax and GST laws in India while optimizing your tax liability legally.

Hi in your case GST and income tax both will be applicable - GST will be applicable since you are providing service form india and also income tax shall be applicable

Hi please note that when you are indian resident you have global income taxable in india. So irresective of funds brought in india or not it will have income tax exposure, and if any tax is paid in Germany same shall be adjusted against indian tax liability

But you can always so tax planning in India to nullify or minimise the tax implication in india using the tax slab benefit and other planning

With resoect to GST also you need to obtain GST irrespective of funds received in india or not and continue filing NIL Return or claim GST Beneift on local expenses incurred for business purpose

This way you can efficiently manage your tax and still stay 100% Compliant

As you are resident in India, you are liable to pay income tax. Income earned through freelancing is chargeable under the head "Profits and Gains Business or Profession". You are liable to pay tax on the Net profit and not on the gross receipts (i.e. turnover)

As you are providing services from India, you are liable to register and pay tax under the GST. To qualify for export of services, the consideration should have been received in convertible foreign exchange which can be substantiated by the FIRC. As you are remitting the consideration from German bank account to Indian bank account, the fulfillment of above condition may be doubtful. If such condition is not fulfilled then you would be liable to pay GST@18% on the services provided. GST is payable on the turnover. Also you are liable to pay GST@18% on import of services for business purpose.

The above tax provisions would be applicable even if you do not transfer funds from Germany to India  

For detailed discussion you may opt for phone consultation