Indie developer taxes payment in India

Hi everyone,

This is a question to Indian developers about how do they submit the income tax return. Since you don’t have an employer when working as indie developer, do you simply submit the ITR1 form without registering your company name? What data to fill in the TDS section of ITR1 form?

I am a C.A Final Guy and have filed hundreds of income tax returns in my articleship.
In devlopers case the income from advertisment dosent fit into Salary
It will come under “Income From Business and Professsion”
You will have to file ITR IV this time.

There is no need to create a new company
You can just file it in you own name
Possibly create partnership firm with any of the family member who does not have other income so maximum income does not fall in tax bracket
No registeration is required for partnership firm too.

Also you can claim some random/bogus expenses against your total income.
Suppose Gross revenue is 10 lakh ,you can show expenses of about 6 lakhs against it(salary to assistants/developers , rent , traveling etc)
So u will have to pay taxes on 4 lakhs only

This is cool. I was wondering about TAN number, TDS, form 16 etc. Thanks for sharing this info. I will look into itr4 form.

How much % of taxes you have to pay from the amount you earned?:slight_smile:

For the first 20000 dollars a year its around 3000 dollars.
After crossing the 20000 limit its 30 percent flat.

man, ITR4 is not easy to fill as I thought. There is balance sheet,loans,investment,Audit related sections in that form.

If your gross revenue for the year from advertising is more than 15 lakhs , u fall under tax audit which implies you need a chartered accountant to fill your return.

If you dont fall in tax audit then you can leave those spaces blank,
Also filling the balancesheet is not mandatory if you dont fall in tax audit
You just need to fill profit and loss account

If it still looks difficult , seek a consultant

Is audit an ongoing activity throughout the year or audit is done when filing return. I am definitely above 15 lakh category.

i just checked the limit -it has been extended to 25 lakhs a year.
when my articleship was over 2 years back the limit was 15 lakhs

audit will be done at only filling of return

One last question, how much should I be paying to CA for filling this return (with earnings near to 50 lakh). Given that I earn from multiple ad networks.

Audit is required only once per year,usually at the time of filing the return. Please contact a chartered accountant for more help. He will do it for a fees

i think a chartered accountant should cost you 5k-10k
dont be shocked if he demands 15 k :slight_smile: its legal requirement to get audit done

i suggest you to start developing under 2-3 firms
also receive payments under different paypal accounts/bannk accounts registered in your mom/dads or wifes name
This way 50 lakh would be splited like 17-20 to each developer and there will be no tax audit next year
You CA will definately advise on the same.

Let me know how much the CA is demanding

you are earning great!
just for sidenote -salary income is not considered for determining the applicability for tax audit
so i am assuming 50 lakhs is only from android advertising

so if 50 lakhs is revenue
and you manage to show 20 lakhs expenses (which still is difficult to show if you dont have expenses)
so profit 30 lakhs
You may have to pay 10 lakhs taxes incase you have not paid advance taxes

On the same note, I need some assistance with a w8ben form. Does any one know how to complete one? I would appreciate a skype chat

Going to meet CA tomorrow.
I dunno what sort of tax suggestion.he gonna give.
But i will avoid tax pay and try every good/bad way to reduce it.
Saying honestly.

@gcc, what did CA advise. Apart from section 80C and 80D, you found any other way to save tax?

Before meeting CA, i asked him what all input/data he needs from me.

I found that i did not pay taxes for my apps revenue for last 1 and half years.
So i collected the data and will meet CA face to face either today or tomorrow.
I will share all the CA suggestions with you.

But i think i may hit the slot where i need to go for tax audit this year.
I might reach > 4500000 INR per year. So i will meet him with all the necessary input.

How about you?

first of all heartiest congratulations on hitting 45lakh revenue. I have 36lakh income this year. So can’t escape audit. My expenses are 21lakh from odesk, code purchase, reskin etc. Plus invested 1.5lakh under 80C.

Man we are supposed to pay advance tax 2 times a year. u skipped it completely and need to pay 1% simple interest in your tax filing. I paid in first installment but skipped second installment of advance tax. I am keeping Rs2.5lakh spare for paying income tax and CA fees.

BTW, do ask CA how much will he charge for his services (I think they charge fees on the basis of your revenue)
and will he do book keeping for you (in Tally or similar software)

I did not ask much on the phone today. Thanks for this Book keeping thing. i will ask him.
How much have you paid to CA till now.

In 2013-2014, i had app revenue below tax slot. so i need not to worry for that.
I made around 1500000 to 1700000 from apps during 2014-2015 and did not pay the tax till now. I am worried for that.

First i will finish my pending taxes and then i will go for tax planning for this year.

i haven’t hired any CA. just made a query on their fees and he was mentioning that fees vary with amount of annual revenue.
if you have earned less than 25lakh in 2014-15 then no need for book keeping. its required for more than 25 lakh.
however u should worry about advance tax and the interest for not paying it.

i will meet CA after 1st April and I am expecting he will charge me Rs50K for consultation, filing and book keeping and will need to pay Rs2lakh for taxes.