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foreign payment - tax clarification

06 May 2019

I have received 25Lakhs from USA for sale of services . ( soft ware development charges other than stps forms registration) what is the tax liability to me. and how I have to pay it.

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2 Replies

Eshan Upasani (Associate Merger and Acquisition) (92 Points)
Replied 06 May 2019

Assuming that you are an Indian resident, the entire amount of INR 25 Lakhs shall form part of your taxable income and shall be liable to tax in India.

I believe that tax has been withheld in USA by the U. S. Company and the said amount may be claimed as tax credit against the Indian income tax liability.

Any Indian tax liability over and above the U. S. tax credit shall have to be paid as self assessment tax before filing your income tax return.

Hope the above solves your query.

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Zeal Bangdiwala (Partner at N. Gamadia & Co.) (363 Points)
Replied 09 May 2019

You also need to work out the Advance Tax liability if the revenue relates to FY 2019-20 or else there will be heavy interest payable u/s 234B and 234C.