Comparison of tax amount for salaried or consultant income

Hello,

As a resident Indian working remotely for a Singaporean firm with a contract through an Indian entity, and considering GST is exempt for your services, here's a concise analysis of the income tax implications:

Income Tax Consideration:

• 
  Annual Income: ₹31.5 lakhs (₹4.5 lakhs per month for 7 months from October 2023 to March 2024).

As a Salaried Employee: Your income tax will be calculated based on the total income of ₹31.5 lakhs, considering standard deductions and any other applicable deductions under sections like 80C, 80D, etc.

As a Consultant: If opting to work as a consultant, you can deduct work-related expenses directly, potentially lowering your taxable income. Without GST considerations, the primary difference would lie in the ability to reduce taxable income through deductible expenses.

Conclusion:

Opting for a consultant role could offer potential tax savings by lowering your taxable income through deductible expenses. However, the exact savings would depend on the nature and amount of deductible expenses you can claim.

For detailed, personalized advice, consider a phone consultancy.

Hope you find the information helpful. You are free to contact me for further discussion.If you could spare two minutes of your time to write a review, It would be really grateful and very happy to read it.

Thank you.

Shubham Goyal

For detailed, personalized advice, consider a phone consultancy.

Hope you find the information helpful. You are free to contact me for further discussion.If you could spare two minutes of your time to write a review, It would be really grateful and very happy to read it.

Thank you.

Shubham Goyal

For detailed, personalized advice, consider a phone consultancy.

Hope you find the information helpful. You are free to contact me for further discussion.If you could spare two minutes of your time to write a review, It would be really grateful and very happy to read it.

Thank you.

Shubham Goyal

You are staying in India or outside India?

Are you tax resident of India or citizen of India?

You are saying if you directly work for this Singapore company? or if you work as contractor?

If you work as contractor you will definitely save money but working as employee directly won't save any tax.

Hope you find the information helpful, if yes do rate if 5 and provide your valuable feedback for my improvement.

Thank you.

As you are resident in India, your income will be taxed in India. The tax implications are broadly as follows:

1)As your contact is with an India entity on behalf of your Singapore employer, you may be considered as providing services to the Indian entity, which in turn is providing services to the Singapore employer. In this case, it is the responsibility of the Indian company, as an employer to deduct tax on your salary income or consultancy income, as the case may be. 

2) Though your monthly salary is Rs. 4.5 L / p.m., your are getting only Rs. 3,62,465/- in hand with deductions of about Rs. 87,535/- . Part of the deductions may be towards PF and TDS. The deductions towards PF will qualify for claiming deduction u/s 80C upto Rs 1,50,000/- along with other investments and eligible expenses, like say tution fee for your children.

3) On the other hand, if the deductions are not towards PF but on some other issues, and your nature of engagement is in the nature of a consultant, your income will be treated as professional income. You will be eligible to offer tax under presumptive taxation,

4) Exact tax calculations will depend upon your nature of income. If its salary, then your income will be Rs. 27 L for the financial year 2023-24 from Oct 2023 to March 2024.You will be eligible for exemptions towards HRA and  deductions towards PF and even NPS.  On the other hand if its consultancy income, your income under presumptive tax will be Rs. 13.5 L only (i.e., 50% of Rs 27 L)

As you are in high tax bracket, it will be important for you to have good tax planning as part of over financial planning for building wealth by considering investments in tax saving mutual funds, residential houses etc.  Please plan your finances properly with the help of trusted professionals. 

Assuming your residential status is ROR (Resident but ordinary resident) then your global income (i.e. Indian income and foreign income) would be taxable in India

- Salary income is taxable at slab rates and tax liability is covered by TDS deduction. Exemptions and deductions are applicable as per law. 

- In case you provide services directly to Singapore firm as an independent professional then you can claim business expenses against the total gross receipts. Under Income tax, you can avail presumptive taxation scheme u/s 44ADA subject to the applicability. Section 44ADA is applicable on gross receipts upto Rs. 75 lacs. Under GST, you would be liable to obtain GST registration and such provision of services would be treated as export of services subject to fulfillment of specified conditions. Export of services are treated as zero-rated services and you can provide services without payment of tax. 

For detailed discussion you may opt for phone consultation

Working as consultant is always beneficial in terms of taxation as flat 10% tax is applicable. And ITR can be file under Sec 44ADA considering upto 50% as income. 

Some facts are required to determine tax implications : 

I understand that since your contract is with Indian company, your tax are deducted in India like any other employee, but you are actually working for Singapore Company from India.  

In case, you work for Singapore company and they pay you directly, they would also deduct tax in Singapore.  Also, you may be taxable in India for same income, but you will get credit for tax paid in Singapore.  

You can only get calculation based on in Hand income, provided your employer agrees to bear the tax in your salary.  So in case you say you want 100 every month, any tax liability on that is to be borne by your employer.  That is merely a structure