Can non-profit organizations pay income tax?

What is the proper way for an independent designer to pay tax and file income tax return in india?

  • I am a male student and I design/sell website templates in my free time. The total income I earn varies but it is around 5 Lakh INR/year. I sell my themes/templates on marketplace websites and they send me my earnings to paypal which then converts my income to indian currency and deposits it in my bank account. My father also sends me some money each month that goes to same account. Now, as I have never paid income tax before, I have some questions : 1) How much income tax am I supposed to pay? Where can I find updated list of tax rates according to income earned? 2) For income earned in 2013 what is the last date to pay tax? 3) Where and how can I pay that tax? 4) Do I need to file income tax return? If yes, where and how? 5) Any other things I need to know?

  • Answer:

    Hi, I have answered your queries in the same order as you have raised them. 1) Income tax is payable on net profit earned by your. The amount of tax payable depends upon the net taxable income slab that you fall in, assuming you have earned Rs 5,00,000 ( post expenses) you would have to pay Rs 30,000 in taxes. 2) The last date of payment of taxes is the last date of filing of returns. The Due date for such filing without interest and penalty is 31st of July. The return however can also be filed, with interest and penalties by 31st of July of the year after the incidence of such income. 3) Tax is payable online, you can use your bank's web interface to pay taxes or use the https://onlineservices.tin.nsdl.com/etaxnew/tdsnontds.jsp to pay your tax dues. 4) Yes, you would need to file a return of income. Individuals earning salary income below 5 lakhs are exempt from filing tax returns, provided they do not have any income from other sources ( barring interest, upto rs 10k) since your income would be assessed as business income you would have to file a return of income with the tax authorities. 5) you would also need to get a PAN number and if you are making payments in India to sub-contractors i.e. people you probably outsource the work to, you would also need to get a TAN number. To be honest, there is a lot to learn and do with respect to your income. I suggest you take an appointment with a CA and learn about the compliances that you will have to undertake. I hope this helps. Regards, Pallav Pradyumn Narang Partner | http://www.arkayandarkay.comThis answer is not a substitute for professional legal advice....

Pallav Pradyumn Narang at Quora Visit the source

Was this solution helpful to you?

Other answers

Pallav has pretty much taken care of your queries in a detailed manner. I am a fellow freelancer and have had the same set of queries you have when I first started. I would just like you to look into the service tax implications (not applicable yet since all your earning is from foreign clients) and the TDS deductions (for point 5 mentioned by Pallav). For more information on this topic you can look at http://bit.ly/Z4yCCZ.

Geetha Prakash

The filing of Income Tax returns is a mandatory duty along with the payment of Income Tax to the Government of India . As the season closes by (last date of filing return - 5th August for 2014), many new tax-payers are in qualms as to how to go with the procedure as well as do away with the seemingly complicated mechanism behind it . Following are some of the pointers , which I acquired through self-learning (all are written considering the tax procedures for an Individual, and not Companies or other organizations). Here goes : 1) Firstly , it is important to understand that Income Tax return is a document which is filed by you stating your Total Income in a Financial Year through various sources of income i.e Salary , business, house property, etc . (Financial Year is the year of your income , and Assessment Year is the year next to it in which the tax is due . Eg - Financial Year 2013-14, Assessment Year 2014-15) It also states the Taxable income on that salary and the Total tax payable with surcharges and Education Cess . The Taxable income has an exemption of upto 2 lakh rupees(For an individual, and not a senior citizen) for this assessment year , and 2.5 lakhs for the next (As per the new budget) . You also get tax exemptions on various other investments/allowances such as HRA , Fixed Deposits , Insurance Policies , Provident Funds , Children's Education , etc under various clauses of Section 80. People should know that return is filed to intimate the Government of your tax statements and it should not be confused with the Tax-refund one gets if there is a surplus tax paid by you to the Government . Return is not Refund . 2) Government of India collects Income Tax through three modes : a) TDS - Tax Deduction at Source . TDS is the system in which any corporation/business as an Employer is supposed to deduct the Income tax of an Employee from his/her salary at source and submit it to the GOI before the end of Financial Year . The tax is deducted regularly from the employee's salary in certain percentage so as to overcome the liability of Total Tax to be paid by the employer for the Financial Year . The Employer issues a TDS Certificate in the form of Form 16 or Form 16A to the Employee which would be used to claim the TDS by the employee while filing his/her return . Form 16 is the certificate issued for the tax deducted under the head Salaries . Form 16A is issued for tax deducted for income through other sources such as interests on securities,dividends,winnings,etc. If the employee has some extra income through other sources , he/she should intimate the Employer about it before so as to include it for TDS . The total tax paid by you through TDS is also available online on the TRACES portal which is linked to your Bank Account and PAN No. for your convenience . You can also generate and validate your Form 16 / 16A from the website to file your return online . b) Advance Tax and Self Assessment Tax . Advance Tax may also be called 'Pay as you earn' Tax . In India one has to estimate his income during the financial year. If your projected tax liability of the current Financial year is more than Rs 10000, you are supposed to pay Advance tax ! This has to be paid in three instalments. 30 % by 15th Sept, 60% minus first instalment by 15th Dec and 100% minus 2nd instalment by 15th March. For individuals who are earning only through salaries , the Advance Tax is taken care of through TDS by the employers and there is hardly any Advance Tax to be paid . But for individuals who have other sources of income , they have to pay Advance Tax . If one forgets to pay he is liable to pay interest @ 1% p.m. Self-Assessment Tax - While filing your Return of Income, one does a computation of income and taxes to be filled in the Return. On computation, sometimes it is noted that the Taxes paid either as Advance Tax or by way of TDS fall short of the Actual Tax Payable . The shortfall so determined is called the Self Assessment Tax which is payable before filing the Return of Income. c) TCS - Tax Collection at Source . Tax Collected at Source (TCS) is income tax collected by a Seller from a Payer on sale of certain items. The seller has to collect tax at specified rates from the payer who has purchased these items : Alcoholic liquor for human consumption Tendu leaves Timber obtained under a forest lease Timber obtained by any mode other than under a forest lease Any other forest produce not being timber or tendu leaves Scrap Minerals being coal or lignite or iron ore Scrap Batteries Salaried Individuals are not concerned with TCS . 3) Online Procedure for Filing your Return , Payment of Tax , and viewing/generating your TDS certificate . a) Filing Income Tax Return : The procedure is as simple as it gets . You have to go to the E-filing homepage of the GOI , i.e https://www.facebook.com/l.php?u=https%3A%2F%2Fincometaxindiaefiling.gov.in%2F&h=uAQFU-1Pp&enc=AZNzNtxnIQ9Hk2CdgzhKRKymeiC2vkgDQ5nmN9507qf6vsfjMmrjqaq75FdReVP0YtFVkgZ1RgbfBWflmg07TRRMZvLJlZRN8DfdCvNE4MNIjc42bQZ1RWiu1HBefaGsEl8k3oxoVsgNV9vk6xYdYlvA&s=1 and login to your account . If you don't have an account yet , you can create it through the 'Register Yourself' link above it . All you need is a PAN No. (obviously) . After logging in , you have to go to the E-file tab and select the 'Prepare and Submit online ITR' option . Alternatively , you can select the 'Upload Return' option to upload your return through an XML file downloaded from the 'Downloads' tab and filled offline by you . You have to enter your PAN No, select ITR Form name 'ITR1' (Form ITR1 is for salaried individuals, income from house property and other income) , select Assessment year and submit . Now all you have to do is fill the form with the tabs Personal Information , Income Details , Tax Details , Tax Paid and Verification and 80G to complete your Return and submit it to the Income Tax Department . The 'Income Details' tab asks for your Total Income through various sources , and Tax exemptions claimed by you under various clauses of Section 80 . It also computes the Income tax liability of yours for that Financial Year . The 'Tax details' tab asks for the TAN (Tax Deduction Account Number) and Details of Form 16/16A issued by the employer/generated by you for TDS . It also asks for Advance Tax / Self Assessment Tax, if paid and the Challan no. of the payment receipt . The 'Tax Paid and Verification' Tab asks for your Bank Account Number and IFSC code . If there is a surplus tax paid by you in the form of TDS/Advance Tax , you will get its refund with interest in a 4 months period by the Income Tax Department . After submitting the Return , you get a link on your registered E-mail id . This link provides you the ITR-V document (an acknowledgement slip) which you have to download , print , put your signature , and send it to the Bangalore division of the Income Tax Department for completion of your Return Filing . The address is mentioned in the document . Alternatively , you can evade the ITR-V process and opt to digitally sign in the beginning of E-filing , but the process requires you to spend money and is to be renewed every year . b) Payment of Tax - You can pay the TDS (Not required for an individual, it is to be paid by the employer) , Advance Tax or Self Assessment Tax through the portal of Tax Information Network , i.e https://www.facebook.com/l.php?u=https%3A%2F%2Fonlineservices.tin.egov-nsdl.com%2Fetaxnew%2Ftdsnontds.jsp&h=UAQGCpu7a&enc=AZP_0DLaSCBcIA2lAThfotvEO91guHTWghNzzaLfsD0fRra0BlH_3cB7Q1Uch1FiwKVWH-MspFOhamyHS_uSzl9iPqjaehaedtb5ctrZajWh8UfVbI6OJ7Sy2TZ4opSzBWqTMgTW24Xk6HImcwQfpMFh&s=1 After filling the required form (ITNS 280 for Income Tax) , you pay the tax through your Bank Account , and get a Challan receipt which will be used during filing your return . c) View/ Generate TDS Certificate online . You can do it by logging on to the TRACES portal of the Tax Deduction System , i.e , http://contents.tdscpc.gov.in/en/home.html You will have to register yourself before logging in through your PAN no. You can view the details of your TDS deducted by the Employer via From 26AS on the portal . Also , you can generate your TDS Certificate in the form of Form 16/16A by entering the TAN No. of your Employer .

Deepak Kumar

Just Added Q & A:

Find solution

For every problem there is a solution! Proved by Solucija.

  • Got an issue and looking for advice?

  • Ask Solucija to search every corner of the Web for help.

  • Get workable solutions and helpful tips in a moment.

Just ask Solucija about an issue you face and immediately get a list of ready solutions, answers and tips from other Internet users. We always provide the most suitable and complete answer to your question at the top, along with a few good alternatives below.