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    Deek_Jedi's Avatar
    Deek_Jedi Posts: 3, Reputation: 1
    New Member
    		  
    #1

    Jun 17, 2011, 09:27 AM
    Tax in India on 1099 contract position
    Hi All... I will be working with a US based company from India. This company has no presence in India and it seems their lawyers suggested that they should do something called 1099. They will not be deducting taxes from their end. What are the tax implications in India? I will be paid in dollars and the money will be wire transferred to my bank account in India (Rupee account).
    Can someone please explain the taxation? Also, if I have to pay taxes, do I have to pay the tax every month? Or can I pay the entire tax at one shot during the end of the financial year?

    Thanks.
    D
    MukatA's Avatar
    MukatA Posts: 7,110, Reputation: 176
    Tax Expert
    		  
    #2

    Jun 20, 2011, 05:11 AM

    If you are a US resident or citizen, the company will send you 1099-misc. If you are not a US citizen or resident, complete form W8-BEN and send it to the company. They will not issue Form 1099-misc.

    Since you are working in India, entire income is taxable in India. If you are US resident or citizen, you will also report this income on your US tax return. On US tax return you will claim credit for taxes paid in India or claim foreign income exclusion. Your U.S. Tax Return: U.S. Citizen or Resident with Foreign Income
    Deek_Jedi's Avatar
    Deek_Jedi Posts: 3, Reputation: 1
    New Member
    		  
    #3

    Jun 20, 2011, 05:26 AM
    Comment on MukatA's post
    Thanks for the update... I am not a US citizen or a resident of the US. I will be living in India and working for the company out of my home office. On the taxation part, how would I know how much tax to pay? My income can vary depending on the number of hours that I work... so do I have to approach a CA every month to get my tax calculated? Also, can I pay the tax towards the end of the financial year? Or would I need to pay the taxes every month?

    Regars,
    D
    Deek_Jedi's Avatar
    Deek_Jedi Posts: 3, Reputation: 1
    New Member
    		  
    #4

    Jun 20, 2011, 06:22 AM
    Thanks for the update... I am not a US citizen or a resident of the US. I will be living in India and working for the company out of my home office. On the taxation part, how would I know how much tax to pay? My income can vary depending on the number of hours that I work... so do I have to approach a CA every month to get my tax calculated? Also, can I pay the tax towards the end of the financial year? Or would I need to pay the taxes every month?

    Regars,
    D
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