Consultant - income tax

Hi, I am working as an consultant for a company in india. 
Salary PA = 20 lakhs rupees, 
Monthly =1,66,667.
After flat 10% TDS, i will get 1,50,000/- per month. So i will be paying 2 lakhs as tax PA. 
Do i need to pay any other tax apart from flat 10%?
Under which all sections can i show the proofs to claim tax?
What is the max amount i can save after showing the proof?
Can you please provide me an example of the same?

Thanks and regards,
Vijay
Asked 1 month ago in Income Tax from Singapore
Hi Vijay,

Could you please clarify whether you are employed by the Indian company, or if you are working as a consultant, what is your qualification?

Regards,
Keerthiga Padmanabhan
M.Com., CA, LL.B
Keerthiga Padmanabhan
CA, Greater Mumbai
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Hi Vijay,

The Indian company will issue a Form 16 to you. You will declare your income under the head "Income from Business and Profession". You are liable to maintain books of accounts and the net profit you earn, after deducting all expenses, will be taxable at the normal slab rates.

Alternatively, you can claim the benefit of section 44ADA of the Income-tax Act, 1961. Under this section, you will claim 50% to be your net profit and you will pay tax accordingly. In your case, Rs. 10 lakhs will be your net income. From this you can claim deductions under Chapter VIA i.e. section 80C deductions like life insurance premium, medical insurance, repayment of principal of housing loan, etc. The resultant amount will be your Net Taxable Income and tax is payable at the normal rates. You will get credit of the TDS deducted by the Indian company.

Assuming you have no other income, for this year, your total tax will be Rs. 115,875 and since Rs. 2 laksh has already been deducted, you are eligible for a refund of Rs. 84,125. You need not pay any additional tax.
Keerthiga Padmanabhan
CA, Greater Mumbai
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You can claim it yourself.
Yes, you will have to maintain books of accounts - like cash account details, bank account statements, bills and invoices of your expenses, etc.
Section 80C - Yes, deduction upto Rs. 150,000. 
Sorry, you will receive From 16A, not Form 16. That was a typo error.
Keerthiga Padmanabhan
CA, Greater Mumbai
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Hi.. 
U can file retun through Yourself or if want CA can help you as well. However, if you want I can assist you. You dont require to maintain books if going under optiion 44ADA. Yes, you will be getting Form 16A and TDS deducted will be reflected in 26AS as well. 
Vidya Jain
CA, Kolkata
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Hi Vijay

Before reaching out to any tax planning, it is important to know your residential status. If you are a Non resident, your income may not be chargeable to tax in India subject to DTAA.

Also, Form 16A is issued to you by the Indian company?

Let us know the above for apt solution.
Lakshita Bhandari
CA, Mumbai
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Hi Vijay,

You will have to prepare your profit and loss account by deducting your business expenses from 20 lacs and you will be taxed on the profit element based on the slab rates. Your tax could be higher or lower than 2 lacs depending upon your expenses.

Alternatively, you can opt for presumptive taxation scheme u/s 44ADA subject to certain conditions wherein your profit will be deemed to be 50% of 20 lacs and you will have to pay tax on 10 lacs as per the slab (as pe FY 2017-18 tax would be around 115000).

Certain conditions of section 44AD is mentioned below:

The following are considered as professionals who can make use of this Section:-

Legal
Medical
Engineering
Architectural Profession
Profession of Accountancy
Technical Consultancy
Interior Decoration

This scheme is applicable only to a resident assessee who is an Individual, HUF or Partnership but not a Limited Liability Partnership firm.

Under this scheme, the assessee would be deemed to have been allowed the deductions under Section 30 to 38. No other deduction for expenses would be allowed to the assessee and it would be deemed that he has already claimed the deductions for all expenses.However, you will be eligible to claim deduction u/s 80C.

The assessee would also NOT be required to:-

Maintain books of accounts under sub-section (1) of Section 44AA, or
Get the accounts audited under Section 44AB in respect of such income.

However, in case the assessee claims that the profits and gains are lower than 50% – he would be required to prepare Books of Accounts under Section 44AA, maintain receipts of all expenses and get his accounts audited by a Chartered Accountant.

Abhishek Dugar
CA, Mumbai
1997 Answers
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Are you an Indian resident because presumptive taxation is applicable only for residents.
Abhishek Dugar
CA, Mumbai
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