Hello everyone,
I need help on deciding how to pay tax.
I am doing internet marketing business. I work for US,NL based company. They want website traffic for their contractors. So I am sending traffic and earn comession from them. For enhncing the business, I hired some peoples from UK,AR,IT,US,FR etc ( no Indians) . So that they send traffic to the company and I will pay a portion of my income to the peoples I hired.
When I started the business, I was getting money to my bank through international wire transfer in USD; once the funds arrived on my account bank converts it to Indian rupees. At that time I used my credit card to pay my affiliates, using payment gateway like Paypal,Moneybookers etc.
Later I got better deals with another company, But they started sending me money to paypal account. Once money reached in paypal account, I withdraw it to indian bank ( paypal supports NEFT transfer).I continued to pay my affiliates using the credit card.
Now my question comes, how I pay the tax, since all my service goes out of India, It can be considered as export of service and I dont need to pay Service tax in india. I gone through all documents on Government website and found ITR4 is the one for me, and I can show as Income from business and profession.My total inward receipt to bank is around 15lac, and my expsense towards paying affiliates using creditcard is around 6Lac. So my net profit is 9Lac.
On /forum/freelance-foreign-income-taxability-123356.asp I found that I can come under
44AD and pay 8% of total receipts(8% of 15 Lacs)
But, on Govt sites I found
1- Construction business as per section 44AD
2- Income from good carriage as per section 44AE
3- Business of retailing as per section 44AF
Now I am pretty consfued, Please suggest how to file my income tax for the FY 2010-2011 ( I know only need to pay after March2011). How can I pay tax in a optimized way and reduce tax.
Please guide me, Which ITR to use and procedure of filling it
CAclubindia
