Advice on Taxation in India
I worked with a small company and was outsourced to the Philippines to work onsite with a client. However, I received my income in my NRE account from Singapore as my employer (company) was based in Singapore for international remittances. I worked in the Philippines on a temporary visa and stayed there for about 2 years, so I have NRI status. But I did not pay any taxes there as I was working on a temporary visa through which I couldn't obtain a TIN number. I know that the government of India doesn't tax remittances to NRE accounts, so there seems to be a loophole. Nevertheless, I understand I still need and would like to declare my income under "profession/freelancer" in India. That's how I paid last year's taxes as well.
Now, I left the company at the end of Sept '14 in pursuit of my higher studies in Belgium, for which I had to pay visa fees a couple of times (due to rejection once) as well as transfer my living expenses for the whole year to the university in advance to obtain financial proof. I also paid for the flights and other minor expenses.
Question on Declaring Expenses
My question is, while declaring my income, can I show the above expenses as business expenses? Can education costs be shown as training expenses necessary to improve skill sets, and other expenses such as rent, mobile, transportation, etc., as necessary and unavoidable expenses for freelancing (business)? It seems a bit far-fetched, but I would like some professional advice as it could save me a significant amount, and considering I am not working anymore, I would like to save as much as possible. :)
Thank you in advance.
Regards, Vineet
From Belgium, Brussels
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2I worked with a small company and was outsourced to the Philippines to work onsite with a client. However, I received my income in my NRE account from Singapore as my employer (company) was based in Singapore for international remittances. I worked in the Philippines on a temporary visa and stayed there for about 2 years, so I have NRI status. But I did not pay any taxes there as I was working on a temporary visa through which I couldn't obtain a TIN number. I know that the government of India doesn't tax remittances to NRE accounts, so there seems to be a loophole. Nevertheless, I understand I still need and would like to declare my income under "profession/freelancer" in India. That's how I paid last year's taxes as well.
Now, I left the company at the end of Sept '14 in pursuit of my higher studies in Belgium, for which I had to pay visa fees a couple of times (due to rejection once) as well as transfer my living expenses for the whole year to the university in advance to obtain financial proof. I also paid for the flights and other minor expenses.
Question on Declaring Expenses
My question is, while declaring my income, can I show the above expenses as business expenses? Can education costs be shown as training expenses necessary to improve skill sets, and other expenses such as rent, mobile, transportation, etc., as necessary and unavoidable expenses for freelancing (business)? It seems a bit far-fetched, but I would like some professional advice as it could save me a significant amount, and considering I am not working anymore, I would like to save as much as possible. :)
Thank you in advance.
Regards, Vineet
From Belgium, Brussels
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Clarification on Tax Advice for NRIs
Regarding tax advice, there is a clarification required. Are you an Indian citizen? Since you mentioned NRI status, I presume you are. Let me clarify: for an Indian citizen, the Income Tax Department categorizes you as a Non-Resident Indian (NRI). NRE or NRO accounts are for bank accounts and are not relevant for income tax purposes.
You can show business-related expenses for a business account only. There are certain expenses you can show to reduce your income tax burden, if any. This work can be done by a qualified tax return preparer and a CA. I am a tax return preparer myself.
You can reach me at [Email Removed For Privacy Reasons].
Thanks.
Acknowledge(0)Amend(0)
Regarding tax advice, there is a clarification required. Are you an Indian citizen? Since you mentioned NRI status, I presume you are. Let me clarify: for an Indian citizen, the Income Tax Department categorizes you as a Non-Resident Indian (NRI). NRE or NRO accounts are for bank accounts and are not relevant for income tax purposes.
You can show business-related expenses for a business account only. There are certain expenses you can show to reduce your income tax burden, if any. This work can be done by a qualified tax return preparer and a CA. I am a tax return preparer myself.
You can reach me at [Email Removed For Privacy Reasons].
Thanks.
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INCOME TAX DECLARATION 2008-09.xls
How to save income tax in India.pdf