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
i think a chartered accountant should cost you 5k-10k
dont be shocked if he demands 15 k 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.
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
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.
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 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.