Hello all, I am doing remote work from India for an American firm starting this month. I am rendering professional legal services in my independent capacity. I am not an employee of their firm.So I have to independently file tax in India. The annual compensation is fixed by the company and I will be receiving compensation in dollars p.m.in my bank account. The amount that I receive each month will vary as per the dollar value. For the purposes of income tax, should I be raising an invoice to the company for the amount that I actually receive in my bank account in INR. Is the invoice required for submitting my income tax returns? Or will my bank statements suffice? Also I am aware that I have to pay professional tax in India. Please explain the mode of payment of professional tax. Has it to be paid monthly or is it enough to pay yearly? Need help with these queries and also need the contact info of a CA based in Bangalore for filing my yearly tax returns. Rani
Sir you need to raise an invoice. Invoice is the basic document stating that you have to receive an amount for the work done.
You need to register for professional tax with commercial tax office situated in your city.
We have a CA in Bangalore, will give details
Hi Ms. Rani,
Your Bank statement is sufficient for Income Tax purposes. Though raising an Invoice is not a prerequisite for Income tax purposes, it is always advisable to raise an Invoice.
For Professional Tax, you have to register with the concerned PT office in Bangalore. I am based in Bangalore and can help you in this regard.
Thanks
CA. Pradeep Bhat
Hi rani,
You can file return as providing professional service under section 44ada (under presumptive taxation) where you are not required to maintain books of account (income and expense details).
what ever is your earning based on your bank account will be considered your gross income and 50% of gross income will be taxable income based on your tax slab.
you can claim deduction under 80C.
and as far as professional tax concerned technical consultants, engineers, are exempted from payment of profession tax for the first 2 years of their practice. (Subsequently the tax ranges from Rs.1000 to Rs.2500 depending upon the number of years of service)
There are certain conditions to be fulfilled and applied to claim presumptive tax. kindly refer the link below.
http://www.charteredclub.com/section-44ad/
I assume as you are going to provide services to overseas from remote base , your expense will be less. so it will be beneficial to opt the above option.
Hello Madam/ Sir,
There is no need to raise an invoice, your bank statement will suffice.
You have to apply for a Professional tax number first in case you do not have one and the amount has to be paid annually.
Trust this clarifies your query.
Feel free to call / get back in case of further clarifications.
Thanking You.
Regards,
Rohit R Sharma
BCOM, ACA, LLB-GEN, CERT. FAFP
You need to maintain books of accounts, which include invoices, if your gross receipts are more than Rs 1.50 Lakhs u/s 44AA(1) of the Income Tax Act read with Rule 6F of the Income Tax Rules. The books of account include copies of bills.
However, if your gross receipts are upto Rs 50 L, you can opt for presumptive taxation by offering 50% of your receipts as income from such profession. In such case, there is no need to maintain books of accounts.
As regards professional tax, you need to register for professional tax as per the applicable in your state.
Dear Rani,
It's better you raise a invoice each month and yes the amount received in bank will be your income. I am assuming you will receive money in foreign currency so there should not be service tax applicability.
Sorry I am unaware about professional tax.
We can help you in filing your ITR if you want.
Please feel free to call/ revert in case of any doubts
Thanks and Regards
Abhishek Dugar
CA CS B.Com
