Tax liabilities for freelancers / consultants?

Sri (-) (27 Points)

13 March 2012  

In the financial year 2011-12, I've been a freelance consultant working in the Software Engineering industry.

 

I have questions about my tax liabilities and will be glad to have them answered.

 

  • * I don't have any company registered
  • * My annual income has been roughly 20 lakh. 
  • * Majority of my income has been by billing overseas clients in exchange for software consultancy services
  • * Other portion has been by billing local clients for the same services. These local clients have deducted tax at source for each invoice I sent them. The deduction was 10 per cent service tax according to them. They have provided me Form-16 certificates for the same.
  • * This year I also became a published author and started receiving royalty payments. The publisher is U.K. based and I don't believe any tax deducations have been made.
  • * Some other minor miscellaneous incomes.

 

I've also had personal and professional expenses for which I've maintained the necessary documentation.

 

Can you please assert the following:

  • * I believe I don't owe GoI any service tax on overseas invoices, yes?
  • * Despite paying some service tax (in the form of TDS) I still owe GoI personal income tax, yes?

 

Am I missing any critical aspect? What would you advise for this year and going forward? Should I set up an organization to better manage things?

Thanks,



Sri