• Will contract employee working directly for US client attract tax

I am working as a Software contract employee for an USA firm and I am being paid salary every 15 days, which gets credited into my Indian bank account.
What are the tax liabilities for me and what all things I need to do to get tax exemption?

Thanks,
Harry
Asked 6 years ago in Income Tax

Hi Harry

I assume you are working from India and not visiting USA.

Your salary income from USA shall be taxable in India only.

Lakshita Bhandari
CA, Mumbai
5687 Answers
908 Consultations

5.0 on 5.0

Are you getting money as salary or as an Consultant. Please confirm to give you answer

Shyam Sunder Modani
CA, Hyderabad
1408 Answers
164 Consultations

5.0 on 5.0

1. Yes. It is taxable in India.

2. Income tax, for sure. GST registration may also be applicable. The contract of employment needs to be reviewed properly. If it's salary, no GST.

3. This would depend on the quantum of earnings; basic deductions being chapter VIA deductions like 80C, 80D etc.

Lakshita Bhandari
CA, Mumbai
5687 Answers
908 Consultations

5.0 on 5.0

Hi Harry,

1. Yes, the income which you earn will be taxable in India.

2. You are liable to pay income tax in India on such income.

3. You can claim the benefit of section 44ADA, whereby only 50% of your income will be considered as your profit. On this 50%, you can claim deduction of section 80C, 80CC, etc. i.e. of payment of life insurance, repayment of principal of home loan, payment of medical insurance, etc. The net amount after this deduction, is your taxable income, on which you will pay taxes as per the slab rate.

Regards,

Keerthiga Padmanabhan

M.Com., CA, LL.B

Keerthiga Padmanabhan
CA, Greater Mumbai
784 Answers
27 Consultations

5.0 on 5.0

Hi Harry,

Assuming you are an Indian resident, you have to pay income tax in India for the profit made from these activities (I.e. money received from us company less expenses incurred in connection with providing testing services).

Assuming your salary is less than 20 lacs per annum, GST is not applicable in your case.

Abhishek Dugar
CA, Mumbai
3576 Answers
183 Consultations

4.8 on 5.0

Hello Harry,

1. Yes, the income earned from the US Firm will surely be taxed in India. we don't let a single rupee go untaxed :P

2. Income Tax will depend on which slab rate do you fall.

3. You can invest a part of the money in Investments which are covered u/s 80C, 80D etc in order to save a part of your tax.

Plus also claim a part of the money for regular expenses for meeting your work requirements.

Trust this clarifies your query.

Feel free to call / get back in case of further clarifications.

Thanking You.

Regards,

Rohit R Sharma

BCOM, FCA, LLB, CERT. FAFP

Rohit R Sharma
CA, Mumbai
2104 Answers
95 Consultations

5.0 on 5.0

Yes, benefits under Chapter VI A can be claimed.

Lakshita Bhandari
CA, Mumbai
5687 Answers
908 Consultations

5.0 on 5.0

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