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Re: Service tax in India

Active Member
Priyanka V Member Since: Apr 19, 2016

do i need to pay service tax in india if my revenue exceeds 10 lakh ??

does it makes a difference if i use local fund transfer or wire transfer ??

i read something that i will have to pay 15% of revenue if i do via local fund transfer and there is no fee for wire transfer ?? can anyone explain why there is a difference ??

 

As i recently read many articles online that our service comes under "Export of Service" and we are exempted from service tax then why it really matters if we either use wire transfer or local fund transfer ??

i read this article here ...

https://www.bankindia.org/2016/05/service-tax-guide-bloggers-freelancers.html

 

 

I need honest reply which can help me solve my query as i am very tensed...

 

 

 

 

20 REPLIES 20
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Community Guru
Juvy Ann P Member Since: Oct 29, 2015

It appears to me that the honest reply can come from someone in India who has experienced going through the entire tax process herself.  Reading articles online will help but nothing beats experience.  I learned the hard way myself.  

Active Member
Priyanka V Member Since: Apr 19, 2016
Many CA are also confused..
I dont know whom to contact
Community Guru
Juvy Ann P Member Since: Oct 29, 2015

In my country, the foreign exchange rate risk that includes losses due to currency conversion via local funds transfer can be deducted from the gross sales (derived from receipts/transaction history report) together with Upwork fees and the local funds transfer rate.  This is new information for me actually but it looks like your service tax is equivalent to our monthly percentage tax which is 3% of the taxable amount a.k.a. net earnings per month.  And then we have a 40% optional standard deduction (OSD) which is applied to net earnings only.  The 40% OSD is for all returns.  I am not sure if the FOREX rate risk can also be applied to the monthly percentage tax.  The information that I got is that it qualifies for all INCOME tax returns - quarterly and annual ITRs.  I am not sure if this information can be of help to you.  But this is my best attempt.  I am still learning, Priyanka.

Active Member
Kaustubha G Member Since: Feb 16, 2018

There's no such thing as "Service Tax" for a freelancer and the only tax you are supposed to be paying is Income Tax and again this all depends on the working relationship with your employer. Remember that although Upwork TOS tells you that you are an Independent Contractor, you may not be so with regards to the employment worker classification rules. 

 

Usually Form 16/16A needs to be provided to you by Elance/Upwork/your employer at Upwork. If none of them provide you that, you can approach your area Assessing Officer and complain them about willfull failure on part of Elance/Upwork to pay taxes to Indian Government. TDS needs to be deducted as per one of the sections below :

 

1. 192 of Income Tax Act 

2. 194J of Income Tax Act

 

For that purpose Elance/Upwork/your employer at Upwork needs to have a place of business in India and have a TAN/PAN number. In the absence of the same, you can report it to your Assessing Officer and file your returns accordingly.

 

There is no other form of tax applicable to Indian citizens.

 

Hope that helps.

 

 

 

Active Member
Priyanka V Member Since: Apr 19, 2016
This information is not useful
Moderator
Vladimir G Moderator Member Since: Oct 31, 2014

Hi Priyanka,

 

Please consult a local tax advisor or accountant. Hopefully other experienced users from India will follow up with more information.

Active Member
Anil P Member Since: Jan 3, 2016

Dear Priyanka.,

 

Irrespective of status you are liable to pay taxes in India for your earnings abroad. The slab of tax will vary for Rs 10 Lacs. Here's a link which will help you. https://www.quora.com/Is-income-earned-from-consulting-abroad-considered-tax-free-in-India     

 

For the nitty gritty you will have to avail the services of a consultant.

Ace Contributor
Arnab R Member Since: Mar 30, 2016

HI Priyanka, 

 

Just ignore it and keep working.

 

 

Ace Contributor
Arnab R Member Since: Mar 30, 2016

Priyanka from the link you have shared:

 

Is Service Tax Applicable on Freelance Income From Outsourced Service?

After reading our service tax guide, you must be confused whether service tax is applicable on freelance income generated from outsource service. Well, again there’s a slight relief for the freelancers. Given the fact that most of the freelancers in the internet industry outsource their services from India to several different countries, they are exempted from Service Tax. As per the Service Tax laws, the Government of India has exempted any Service Tax from all services that are exported out of India.

However, there are certain laws and eligibility criteria to determine whether the service provided falls under “Export of Service” category or not. It is advisable to consult a Chartered Account and he/she may help you further understanding the whole scenario.