December 21, 2013



I go through your Website and know about your Co, its Really supportive for all Tax Solutions,
could you pls advise me about some Tax issue and deduction. pls find below details.

I joined a company as a consultant for Uk based Co. as Contract they will pay me $2000+$150 Expanses per month via bank Transfer into my Indian  saving A/c.
1. Every month I raised  invoice in favor of their Company against the invoice they did paid, but in invoice i didn't charge any Charges like Service tax or VAT, can i have to add on given above Amount, please explain in Details.
2. I started as consultant with them in july onword. what will be total taxation, when and what date i have to submit Income or other tax
3. Is there any income tax Deduction will be applicable?, instead of its supporting our economic via getting fund from other country.? Please explain me in Details. As individual Consultant what minimum  tax liabilities have to follow?
I have pan card but till date i didn't file.  ITR pls answer above question with solutions.


It is good to know that you liked our website, we would try to give best possible solutions to your query. Please find your answers below:

1. Since you are acting as a consultant, I can assume that you are not selling any goods to the company and you are providing only services. Thus no VAT will be applicable on your goods but service tax will be applicable if your services does not come under negative list of Service Tax. You will have to collect service tax at the moment your total turnover exceeds Rs. 10 lakhs.

2. Since you are acting as a consultant you can claim expenses from your fees of $2000. You can claim the expenses incurred in earning the above mentioned income (eg. Rent, Telephone Charges, Salary etc). Income tax would be calculated from your net profit. Assuming that whole $2000 is taxable and you did not incurr any expenses, your Income tax will be around Rs. 158620.00. Tax will have to be paid in installments as Advance tax.

Service Tax will be charged on bill amount @ 12.36%.

3. You can get deduction of LIC premiums, 5 year FDR, PPF deposit etc. upto Rs. 1 lakhs and there are more deductions but it will depend on your investments such as Educational Loan interest, mediclaim, donations etc. You will not get any exemption even if you are earning foreign currency for the country.

For further details and queries feel free to contact us. Please give us your type of consultancy to foreign company, any expenses you incur, your invetsments for deduction for detailed solutions.

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