Tax on Income earned by providing IT Services to Clients

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  1. RajeshP

    RajeshP New Member

    Hi,
    I thought a lot before posting this if it is a valid query or not. My query is I am doing my own work, I am giving IT (Information Technology) support to various IT and non IT organization locally. I am working at very low scale. Getting paid monthly from my clients. I have 2 resources hired on salary basis. I haven't registered myself or my work due to low scale income and expenses. My yearly gross income is near to 6-8 Lacs. My Query is

    1. Under which category My work will be counted. Is it necessary to get registered under a company name etc.
    2. How my income will be calculated. I alone run this and hired 2 resources on salary basis.
    3. What are the tax liabilities I am bound to and how it will be calculated

    Thank you in advance and hope my queries are good enough to be answered
     
  2. Manoj Mehra

    Manoj Mehra Active Member

    1. Your work would be counted as Income from Business/ Profession. It is not necessary for you to create a company and you can continue doing this in your personal name
    2. The expenses incurred by you would be deducted from the total sales made by you and the balance amount be considered as the Income.
    3. Tax would be levied on the income computed in the above manner as per the income tax slab rates.
     
  3. RajeshP

    RajeshP New Member

    Thank you Manoj and appreciate for your help. someone told me that if I am crossing over 10 Lacs gross income yearly then I have to get registered my business. Is is mandate ? And if so then what kind of taxes will be attracted in such condition. because I am getting paid by my clients as a monthly salary in their books.
     
  4. Manoj Mehra

    Manoj Mehra Active Member

    If the value of Services provided by you is more than Rs. 10 Lakhs - then Service Tax is applicable.

    And you would be required to apply for Service Tax Registration as soon as the total value of services provided by you in a Financial Year exceeds Rs. 9 Lakhs
     
  5. RajeshP

    RajeshP New Member

    Thank you Manoj
     
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