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Income tax on money earned from IM

Discussion in 'White Hat SEO' started by sneha, Dec 7, 2014.

  1. sneha

    sneha Jr. VIP Jr. VIP

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    Do you guys pays income tax on IM money?? BTW how the income tax works like I have opened a PP accounts where my PAN card is linked, will PP send this money info to the Income tax department.

    What if I use multiple bank accounts and use friends PAN card to verify PP in a little blackhat way :p
    will they catch me.

    All sound like a complete noob but I am completely unaware of these things. Let me know what you people think.
     
  2. kevin09

    kevin09 Jr. VIP Jr. VIP Premium Member

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    yes u have to pay income tax for money earned from IM.. and yes all the info will be send to govt as u have mentioned ur pan card.. the blackhat way is to use different people paypal accs with der pan card.
    hope tat helps :)
     
  3. PandaDomo

    PandaDomo Senior Member

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    Yep, I think you have to submit a W9 or 1028 or something like that, I forgot which it was for misc. income. I believe if you use Google Adsense or Clickbank, they also automatically send your earnings report to the government.
     
  4. Nut-Nights

    Nut-Nights Jr. VIP Jr. VIP

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    I have done study in income tax.

    Here is your answer. IT dep track your all transactions through PAN card. If you stay in limit of 2 lakh you will be fine, you dont need to pay tax. Once you cross 2 lakh you have to pay tax. All income will come under Other sources and you will get deduction of every expense you incurred to earn that money.

    You cant use some one PAN card and bank account in India, If you use friend PAN and bank account he will be liable for all the payments recieved, IT dep. will do scrut. to investigate transactions.

    If any one need to know how to distribute your income to save tax, can contact me. :)
     
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  5. abhi007

    abhi007 Jr. VIP Jr. VIP

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    yea i will need help on saving income what can you suggest me...bcoz already received money through WU like 3 times this year since it also comes into consideration because of we submitting our PAN details.
     
  6. DanTe_0101

    DanTe_0101 Senior Member

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    Also interested in hearing more on this.

    I have heard something like creating a company and paying yourself little money as salary to evade taxes...
     
  7. Asgardian

    Asgardian Regular Member

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    Well I heard if you use Payoneer for like ~$10k a month you will be under the radar and you won't have to pay any taxes, however another thing you can consider is opening an offshore company.
     
  8. abhi007

    abhi007 Jr. VIP Jr. VIP

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    are you talking abt India here?

    if yes then no payoneer doesnt work in India from what i know.
     
  9. sully1975

    sully1975 Jr. VIP Jr. VIP Premium Member

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    Tax EVASION IS UNLAWFUL. Tax AVOIDANCE IS YOUR CIVIC DUTY AND UTTERLY LAWFUL. Please don't ever misuse the word, especially during an audit. I am in construction and the auditors look for trick statements to dig deeper in these fishing expeditions. Example: How many 1099 employees do you have? Answer: It is a trick question

    PS: Without being an accountant in an single way, one of the two big ideas is using your revenue stream to give you benefits in pretax dollars instead of just lump suming as a sole proprietor or the default flow through LLC way.

    In America, you have "C-corps" aka True Incorporated which fell out of favor for small time operators but in some circles is making a come back or trying to for tax planning reasons. One of the coolest things is the different tax year ending these entities can have.

    Just to throw things into flux. A LLC can elect to be taxed as an C-corp, as it could elect to be taxed like an S Corp, etc.... they are versitile. From what I read as a pedestrian in the tax planning. The LLC operating agreement is the weak point in these and has to be better documented and it can hold better water.

    As I said, just an average Joe.
     
  10. Asgardian

    Asgardian Regular Member

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    I'm saying generally about countries who can use payoneer.. But few people from India told me recently that payoneer is not allowed there..
     
  11. Nut-Nights

    Nut-Nights Jr. VIP Jr. VIP

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    If you guys need to save money, Just create paypal of your brother or sister (Must be 18+) with all valid details and send your earning from one source, directly to your brother and sister paypal account, They also have 2 lakh limit so you can save 2 lakh from tax. But dont send money from bank to bank as it will still count as your income.

    Avoid hiding transaction from tax dep. as they keep special eyes on all foreign transaction.

    e.g. you have aff account with any aff network, add your brother and sister paypal directly in that aff account and withdraw money in their paypal. If in case IT dep. ask you anything just tell them, that income is earned by your sister or brother from diff. online source.

    @DanTe_0101 avoid doing that, you may get in trouble. Just consult C.A for company tax related problem. But there is lots of other ways to save tax if you have company, but tax will be much higher.
     
  12. iamsolo

    iamsolo Power Member

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    what about service tax? Govt recently imposed service tax on IM earnings. Correct me if I was wrong. What about investing in PPF ELSSF to avoid taxes?
     
  13. abhi007

    abhi007 Jr. VIP Jr. VIP

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    you can always invest in LIC policies.......i dont think these LIC policies have any particular advantage apart from some tax getting deducted.
     
  14. srb888

    srb888 Elite Member

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    It's better to use the names and pan cards of your family members and have their bank details in Paypal, and then conduct your business in their names as separate individuals. Then you can show the income belonging to individuals, and they can file separate IT returns. There will be more benefits (than disadvantages, if any,) to everyone this way, than to conduct the whole business in your own name, reach a higher IT slab, and therefore pay a higher income tax. Get a proper advice from a tax consultant and he will guide you how you can save, and also help your family members.

    Of course, if the family member has his/her own separate income, then this will add to his total income and he/she can be in higher tax bracket. But there are always some family members who are still not earning a salary, etc. Like the student children, who can have this income help them save of paying for higher studies, for their immediate money problems, for buying what they have always wanted, and after paying the income tax if they still come under that bracket.

    Or you can still use the collective income the way you wish to anyway (in a good sense), withdrawing from their bank accounts (of course talk about it with them if you have to) for overall home needs... let there be no future confusions, somethimes they can arise, when doing this.

    P.S.:
    I've done this before... Since 2007 or 2008, I have written articles, and I've used my son's PP and bank account and used it as a separate income source. He was still in college then, and he was probably the only student in his entire college who was earning payments in dollars and pound sterlings. :). Of course PP was converting the income to INR, but he was very happy and thankful that he was getting an income. I remember that once a bank officer asked me about what is Paypal, and I told him it is a giant US financial sector company, like Bank of America or Chase Manhattan is, and I showed him surprise that he wasn't aware of that! That kept him quiet and didn't asked more stupid time-wasting quesions. lol

    The point is: I had a taxable income then, and this new account (my son's), helped me deflect some money to his account and as that was still not in taxable bracket, we saved upto 1.5 lakhs p.a. without paying income tax on it. I asked him to write some articles and send it to my email, just to be on the safer side, and then edited them or rewrote them to make them fully acceptable to my client. Now he is working and I have stopped writing, but that time both the accounts helped a great deal. But if you too want to do this then take a proper advice from a CA, for example. There may be more and better loopholes to save the taxes, legally too, than this for individuals of a family.
     
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    Last edited: Dec 8, 2014
  15. Nut-Nights

    Nut-Nights Jr. VIP Jr. VIP

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    Dont provide services with in India. Dont go for PPF or ELSSF shit, its like blocking your money for specific period.
     
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  16. natedogg

    natedogg Regular Member

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    Is taxes cheaper having a LLC or adding the affiliate money I made this year to my full time job... Anybody? I'm in the US
     
  17. David9

    David9 Newbie

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    consult with Auditor u get proper guidance
     
  18. Nut-Nights

    Nut-Nights Jr. VIP Jr. VIP

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    Fix it for you .
     
  19. EvidenceSEO

    EvidenceSEO Newbie

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    Income tax is paid on all income you generate, including IM.
     
  20. Drift

    Drift Newbie

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    Perhaps, this could be an off topic question.

    Is it necessary to have a PAN card to send payments via PayPal from our account.? Although, I've already applied for PAN.