I was a salaried employee until May this year and have now turned to being a fuilltime freelance writer. This comes with its own issues of learning how to calculate and pay income tax. I have a few queries that I need help on. Request your help on these.
1. Will my income (from salary for the year include my March salary, that was credited in April) or will it only be calculated from my April salary (credited in May) for purposes of calculating my taxable income? 2. I am earning a living from writing for clients abroad and being paid on a contractual basis for my work. Does this make me eligible for some tax rules for earning money in foreign currency? In other words, do I have to pay more tax for earning in dollars or does the standard rate apply? 3. Do I need to pay advance tax? 4. What is the easiest way in which I can compute my earnings and tax to be paid? I do not know any CA and hiring one is too expensive since I am not earning much right now? Can expenses like rent, telephone and internet bills, society maintenance charges etc. be claimed as deductibles? What all can be claimed as deductibles/expenses? 5. I stay in Ghaziabad/Noida? Is there anyone you could refer me to who could help me with this calculation and payment of tax at a reasonable rate?
13 September 2012
1. Your income from salary will include only the salary of April, 2012. The salary of March, 2012 paid in April is taxable in the year 2011-12 itself.
2. NO special rates are applicable to income earned in foreign currency. Your income shall be taxable at the normal slab rates.
3. You need to pay advance tax if the total estimated tax liability for the year comes to Rs. 10,000/-.
4. ALL expenses earned to earn the income are allowed as deduction.
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