Sell source code directly from blog through email: what taxes are applicable?

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  1. Gururaj P Kharvi

    Gururaj P Kharvi New Member

    I'm a Individual android developer(not own any company) and I have a android blog where i decided to sell my android project source code to my visitors through email after he makes payment through paypal or skrill. May i know whether it is valid to sell product like this? and if it is fine to sell then please let me know the taxes(national & international). I'm just a beginner. Please HELP.
     
  2. ZED

    ZED Well-Known Member

    You are earning income from profession and hence as per S.44AA of the Income Tax Act,1961 , you are mandatorily required to maintain all the records.
    All your income and expenses which are related to business should be recorded by you.

    How much do you earn? If you earn more than 10 Lakhs in a year then Service tax is also applicable. Service in relation to information technology software is a taxable service.
    In some cases it is possible that Service tax is not applicable but VAT is applicable.
    When the software is provided as a "goods", in a physical format then it can be treated as good. But, if the software was very specific as per the requirement of the client then it would be considered as service only and ST will be applicable and VAT won't apply.

    Kindly read the highlighted text


    “Information technology software” means any representation of instruction, data, sound or image, including source code and object code, recorded in a machine readable form, and capable of being manipulated or providing interactivity to a user, by means of a computer or an automatic data processing machine or any other device or equipment.


    [S.65B(zzzze) of Finance Act 1994]
    “Taxable Service” means any service provided or to be provided to any person, by any other person in relation to information technology software, including,- (i) development of information technology software, ii) study, analysis, design and programming of information technology software, (iii) adaptation, upgradation, enhancement, implementation and other similar services related to information technology software, (iv) providing advice, consultancy and assistance on matters related to information technology software, including conducting feasibility studies on implementation of a system, specification for a database design, guidance and assistance during the start up phase of a new system, specifications to secure a database, advice on proprietary information technology software, (v) providing the right to use information technology software for commercial exploitation including right to reproduce, distribute and sell information technology software and right to use software components for the creation of and inclusion in other information technology software products, (vi) providing the right to use information technology software supplied electronically.
     
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  3. Gururaj P Kharvi

    Gururaj P Kharvi New Member

    Is it ok to sell product on blog without company? how about international tax(The product may be sold to out of country)?
     
    Last edited: Jul 13, 2016
  4. ZED

    ZED Well-Known Member

    In most of the cases it would be taxed in India only. When you make an agreement with the prospective client then always add that any tax in his country shall be borne by him and not by you. This way, even if there is tax, you will not be liable to pay it. This is normal practice.
     
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  5. Gururaj P Kharvi

    Gururaj P Kharvi New Member

    Thank you so much...but i don't know selling product on blog is legal or not without company.
     
  6. ZED

    ZED Well-Known Member

    You can, no issues.
    But you will have to maintain proper records of all your receipts and payment and all the assets and liabilities.
    Wherever possible, obtain PAN.
    Do file ITR also and pay the due taxes.
     
  7. Gururaj P Kharvi

    Gururaj P Kharvi New Member

    Sir, Do I need to send invoice copy after purchase is made? How can i do that without company?
     
  8. ZED

    ZED Well-Known Member

    You can. It is not necessary to create a company for all that.
    Invoice would be on your name. In my previous post I asked you about your annual Income, kindly tell the amount.
     
  9. Gururaj P Kharvi

    Gururaj P Kharvi New Member

    Sir, Before i'm working in MNC and i left my job(Currently no job, Freelancer) and started android development and blogging where i developed 8 games(live on play store) and i have android blog. The overall annual income(From adsense) does not cross even Rs. 30,000 So i thought of selling some product on blog. Please let me know sir if there is any legal issue to do so.
     
  10. ZED

    ZED Well-Known Member

    Till 10 Lakhs there shall be no tax except Income tax Act.
    Kindly note that 10 Lakhs which I mentioned is revenue from your app development and related activities and does not include your other income.

    No issue of which I know. I believe it to be a normal transaction. People even do sell the online art and Avi.
     
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