There is always a dilemma in minds of Indian professional and website owners, whether they need to file income tax return for their online earnings.
Your online earnings may include commissions earned by Google AdSense, commissions earned for selling products whose money is paid to your Paypal account and other online means of earning. Now for most newbies, the confusion arises about the tax treatment of such earning.
Firstly, the online income earned (be it AdSense, or commissions paid via Paypal) is taxable in India (if you are a Indian citizen). This Income tax can be paid under the head ‘Income from Business or Profession’ or under ‘Income from other sources’. You can claim all the deductions and expenses like phone calls, computer cost, broadband service, cost of maintaining employee and all other associated expense. This will reduce your taxable Income. After all deductions if your taxable income is more than Rs 1.5 lakhs (men) or Rs 1.8 lakhs (women), then only you need to pay Income tax otherwise just file the returns. Just use any Online Income tax calculator to find the exact amount. Google AdSense Publishers are not liable to pay any Service tax.
One more common question being, What all documents you need to maintain/show while filing taxes. Well, your bank account books (Pass books) do all the work. All the details on your bank accounts passbook prove the expenses and earnings (this obviously include AdSense earnings, paypal transactions etc). The receipts received from AdSense, documents from other source needs to be just kept safe. You may be asked to provide these documents if auditing of your account is done.
If you have not kept the copies of the received AdSense cheques or the receipts then just take printout of the statement of earning from your AdSense dashboard.
Another issue being that of the cheques dates (should it be cash basis or actual earning date basis). As we know AdSense earnings are paid one month in arrears, that is the money you earned in month of March is paid in April. Well you can choose any among the two. Just keep a record of what you are opting at. I would suggest to go with the cheque date basis. I mean if your cheque is dated (month of March) then those earning will be included for Month of April (even if they were earned during February).
You can file your returns online or you may consult a CA about the Income tax returns on your online earnings. If you are filing your returns (on online earnings) for first time, then I would suggest you to consult your CA about your Income tax return. He will also help you to sort out if any queries implied by Income Tax Department after filing the return.
Your online earnings may include commissions earned by Google AdSense, commissions earned for selling products whose money is paid to your Paypal account and other online means of earning. Now for most newbies, the confusion arises about the tax treatment of such earning.
Firstly, the online income earned (be it AdSense, or commissions paid via Paypal) is taxable in India (if you are a Indian citizen). This Income tax can be paid under the head ‘Income from Business or Profession’ or under ‘Income from other sources’. You can claim all the deductions and expenses like phone calls, computer cost, broadband service, cost of maintaining employee and all other associated expense. This will reduce your taxable Income. After all deductions if your taxable income is more than Rs 1.5 lakhs (men) or Rs 1.8 lakhs (women), then only you need to pay Income tax otherwise just file the returns. Just use any Online Income tax calculator to find the exact amount. Google AdSense Publishers are not liable to pay any Service tax.
One more common question being, What all documents you need to maintain/show while filing taxes. Well, your bank account books (Pass books) do all the work. All the details on your bank accounts passbook prove the expenses and earnings (this obviously include AdSense earnings, paypal transactions etc). The receipts received from AdSense, documents from other source needs to be just kept safe. You may be asked to provide these documents if auditing of your account is done.
If you have not kept the copies of the received AdSense cheques or the receipts then just take printout of the statement of earning from your AdSense dashboard.
Another issue being that of the cheques dates (should it be cash basis or actual earning date basis). As we know AdSense earnings are paid one month in arrears, that is the money you earned in month of March is paid in April. Well you can choose any among the two. Just keep a record of what you are opting at. I would suggest to go with the cheque date basis. I mean if your cheque is dated (month of March) then those earning will be included for Month of April (even if they were earned during February).
You can file your returns online or you may consult a CA about the Income tax returns on your online earnings. If you are filing your returns (on online earnings) for first time, then I would suggest you to consult your CA about your Income tax return. He will also help you to sort out if any queries implied by Income Tax Department after filing the return.
