Missed december deadline for advance tax

Page no : 2

Sandeep (Founder) (43 Points)
Replied 25 December 2014

Is there a proof required apart from a confirmation from hired freelancer on an invoice like the one attached along with for proving that a person was actually hired and paid that much amount.

Attached File : 1382808 1391989 aditya kumar.xlsx downloaded: 115 times

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Roshan Thomas (C.E.O ) (356 Points)
Replied 25 December 2014

I would like to add three points. There is no point in paying interest now. Pay the correct advance tax in march. Int u/s 234c will have to be paid forshortfall this quartner no matter what. Second payment to non resident freelancers willnot be liable to tds Third you will have to get your accounts audited this year and deduct tax on payments from next year onwards. Also pls dicuss whether you are liable to pay service tax with your CA. Liability depends on location of your customers

Dhaval Karania (Prop) (23 Points)
Replied 25 December 2014

No requirement of deduction of Tds if you we're not liable to audit in the preceding year. And in the next year it is advised to apply for TAN and start deducting Tds from the start.

Sandeep (Founder) (43 Points)
Replied 25 December 2014

Thanks Roshan and Dhaval. I will wait for this quarter then. Will pay interest in April along with tax return.

Book keeping if done in April just before Audit, I hope that will also be fine?

CA ANKUSH AGGARWAL (CHARTERED ACCOUNTANT) (2782 Points)
Replied 25 December 2014

@ dhaval ...he already has TAN

@ sandeep you better hire outsource or hire someone to keep your books from now....so that it would be easier to conduct tax audit for this year.If you are thinking of starting book keeping from april,then it would be more messy.From next year oneards start deducting TDS

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CA ANKUSH AGGARWAL (CHARTERED ACCOUNTANT) (2782 Points)
Replied 25 December 2014

One more important thing ...take pan of freelancers and quote the pan on invoice otherwise TDS rate of 20% would be applicable

Sahil Bhatia (Practicing Chartered Accountant) (290 Points)
Replied 26 December 2014

Sorry for the wrong information and thanks ankush, there is no upper limit for section 194J and if bill amount is Rs 30k or more than tds is required to be deducted. And as advised service tax is applicable to you and you are required to get yourself registered if your gross receipts exceed 10 Lakhs. So concluding every comment i would say that you should just talk to few CA's for quotation for your work and choose as per your satisfaction.

Sandeep (Founder) (43 Points)
Replied 26 December 2014

OMG!!!!!

https://www.shoutmeloud.com/service-tax-india-bloggers-freelancers.H T M L

Does govt really want me to earn something this year. 12.36% flat service tax on turnover + income tax on net income + Book Keeping fees + Audit Fees

As confirmed in this thread, I don't have to deduct TDS this year else if I recover TDS + Service tax from freelancers they won't work for me at so low payments. This is happening when I am totally operating from home without purchasing office space etc.

Out of total turnover of approx 25-30Lakh, I would be able to save max 10Lakh. Rest all spent on hardware, software, freelancers.

Left my job so that I would be able to make 25L+ this year but looks like taxes won't allow it. No susprises why people want to evade taxes and stash abroad.

Now need to apply for service tax registration and pay it out of my pocket as can't recover it back from freelancers in India (The invoice I had sent them didn't have my service tax id on the invoice). I don't have any freelancers hired abroad (just using websites which are based out of USA like odesk.com and fiverr.com). That's why people also go for fake bills.

Thanks everyone for making me aware of so many things. Hopefully this thread will be helpful to other freelancers also.

Sahil Bhatia (Practicing Chartered Accountant) (290 Points)
Replied 26 December 2014

Need to Inform you one more thing thats if you are providing services outside india then you are not liable to pay service tax so if you are billing Indian clients <9 lakhs then there is no need to get registered in service tax.

Sahil Bhatia (Practicing Chartered Accountant) (290 Points)
Replied 26 December 2014

I know these stuff because my brother is also a freelance programmer and this is a kind of work where you can save a lot like office space etc.

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Sandeep (Founder) (43 Points)
Replied 26 December 2014

Originally posted by : Sahil Bhatia
	Need to Inform you one more thing thats if you are providing services outside india then you are not liable to pay service tax so if you are billing Indian clients <9 lakhs then there is no need to get registered in service tax.

I don't have any clients dear. I have android games uploaded on play store. People from all over the world download and use them. I earn from ad networks which show ads in my games. All the ad networks I am using are based out of India (mostly Israel). I haven't earned a single rupee for indian clients. Am I spared from this service tax thing?

Sahil Bhatia (Practicing Chartered Accountant) (290 Points)
Replied 27 December 2014

As per my discussion with my boss and colleagues, If you dont earn anything from indian clients then you are not liable for service tax.

Sandeep (Founder) (43 Points)
Replied 27 December 2014

Thanks for confirming Sahil. I also thought so.

CA Raj Doshi (Practising CA) (8903 Points)
Replied 30 December 2014

You earn from the society at large. Taxes are your contribution in return to the society without whom such profit would not have occurred to you. Tax planning is good but not tax evasion. All taxes are borne by the end consumer and not you. Eg. You charge 10000 as your fees. With service tax in the picture, you will charge 10000 + 12.36% ser tax from your client. So, then you collect from client and deposit equal amount to government. You lose not a single penny.

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CA Raj Doshi (Practising CA) (8903 Points)
Replied 30 December 2014

Which means you collect 1236 from client and pay the same to govt. You get your 10000 in full. Also for book - keeping and other compliances is best to hire freelancing accountant having knowledge of all things like tds, voucher making, etc.