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Google is not deducting any taxes for Non-US publishers, instead, it is sending check to all Non-US publishers, especially Indian publishers the full amount earned.
My question is, how all non_US publishers are handling the taxation at their own country?
Especially in India?
I am going to file tax return for all of my G income...talked to one lawyer, he told, in India, any foreign money earned in USD currency, whatever the amount is, deducting the expenses (like hosting fee etc,) is tax exempted. Only I will have to file it for a IT-Return. That's all.
I always want to remain in the legal side of all world.
Yes the issue u raised also bothered me in the past.
well i have reported in my it return as income.
this i say because i am myself a chartered accountant with taxation as my special area of interest although i do not practice taxation.
ask ur lawyer to be more specific. because to my knowledge there is no section, sub section, clause, subclause which specifically exempts it.
ask him under which section he is forming his opinion on.
(i have done a review of all Sec.10, 11,12, 13, sec 80's and the like)
and the principle of taxation as understood is "unless specifically exempted, all income are taxable" (in line with sec.2(24) of IT Act, 1961)
SO my advise would be just ask ur lawyer to be very specific and cite the section under which he is basing his opinion.
The general conception that any amount earned in US dollars will attract special treatment enabling exemption is misunderstood.
any foreign money earned in USD currency, whatever the amount is, deducting the expenses (like hosting fee etc,) is tax exempted.
I think this is true only if you have an import-export number not otherwise.
I agree with sunandoghosh here
my advise would be just ask ur lawyer to be very specific and cite the section under which he is basing his opinion.
I would like to start with something...
"you must know the law in order to break the law"
the fact that u r not reporting is ok for time being but in the long run it can invoke some trouble...
i will just give one example to show that why...
since u r receiving the cheque (us check) and not hard cash, it leaves a definite "audit trail" at various points and its entire flow can be traced from origin to destination.
Now if your checks are just of few hundreds dollars per year then probably you will be successful in your attempt of tax evasion by not reporting.
The reason being governemnt of India or for that matter any govt even of developed countries apply a concept called "Materiality" whereby only those transactions which are material or significant enough are put under review and if there be a further need subject to rigorous scrutiny.
This is essentially randomly done with more weightage to high vale transactions which typically would involve thousands of doallrs per year.
The aboe is a very partial picture of how things actually work as full explanation would entail too much writing.
SO the essence is ok if you are earning less you may be successful in evading taxes but dont take risk if you earn anything which is substantial.
Thast just an advice...
Hope it helps...
p.s. "I am saving 30% of every check in a special bank account for taxes. (Netherlands)"
i would be happy if u can elaborate it either here or through a sticky mail at ur convenience...
The 30% IncomeTax you talk of , is on INCOME not collections. Obviously, when you or your CA does your accounts. he taken into account the money you spend on as expenses.
You cannot keep it as secret. Its illogical. Your penalties would be very high, too high to handle.
I guess thats a hint enough.
For more, send a sticky to me. I am in India too.
i hope the q actually is
"what IF my earnings are no where near 1.5lakh.....my earnings are like 1/3 OF it per year."
Then u need not worry at all because u will have taxable income (also called total income or net income) below the maximum exempted amount under sec.139(1) of The IT act, 1961.
Thank you very much for your good information. In fact, I am going to file IT-return, as I told in my first post in this thread.
You have mentioned about several sections, Is there any Indian Govt. website, where from I can get more info about this and details about all such sections?
Actually it is very very unfortunate that although we have made so much development in last few years especially, the online availability of uptodate correct comprehensive information about income tax law in particular is NOT available in any Indian website to my knowledge.
Even the relevant govt websites r not up to date and in many cases r exact paraphrase of bare IT act which hardly helps.
There is one website but it charges money for taking subscription. But i never felt the necessity of subscribing as i can have access to information offline and furthermore there is no way beforehand that u can know the quality of info after subscription on such websites.
so i guess i am not helpful in this regard...
My best advice would be consult standard books on income tax which are readily available in the market...
I do not practice taxation but i like it as such...
if u come to know of any particular section and want explanation just ask me i will try my best to make it available here...
and yes as far as my knowledge goes, none of the sections i have mentioned above allow for exemption of earned usa dollars...so my best guess again is we got pay tax...
also consider visiting this thread please
"Where I come from ignorance of the law is "no excuse" i.e not a means for defence. "
yes thats even true in indian context as well...
Ignorance of law is no excuse and so cannot be entertained as a reasonable ground for granting certain relief. Legislation cannot be imputed with the ignorance of law of the land and no superfluity can be assigned to it vis-a-vis the law it enacts. No superfluity in a statute can be ascribed to the legislature. Ignorance of laws which legislature enacts much less of various provisions of a same stature can not be imputed to the legislature. Publication in official gazette is legally presumed to be an information to all and the absence of knowledge of such publication can not be pleaded in the same way as ignorance of law.
These are the verdicts of superior courts given on a lot of occasions in the history of law. “Ignorance” is a lack of knowledge and implies a total want of knowledge in reference to the subject matter. On the contrary “mistake” admits knowledge, but implies a wrong conclusion. The distinction between a mistake of law and ignorance of law is that mistake implies action under a misapprehension of law, while ignorance implies in activity for want of knowledge of the law. Ignorance implies passiveness; mistake implies action and so, the maxim: “Ignorance of law is no excuse” which is familiar to all minds but ignorance of facts, is the want of knowledge of the fact in question, which must be excusable. There are certain other perceptions where the maxim “Ignorantia juris neminem ex-cusat” (Ignorance of law is no excuse) does not apply. Such as to a matter of law arising on the doubtful construction of a provision, and is a rule of necessity and is limited in its scope by the reason of it. Such reason is that otherwise mere ignorance is fact of law the law would furnish immunity from punishment for violation of the Criminal code and immunity from liability for actual loss for violation of personal and property rights.
In another decision of a foreign Court it was observed that the maxim the ignorance of law is no excuse, no doubt, a well-known time honored principle, but it has lost much of its relevance in the context of the present day legal system. Replete with complex legislation touching upon every aspect of life, It may be said about Sales Tax Law, it has become so complicated and complex and often require for compliance, therewith assistance of tax consultants/practitioners specializing in this field, is a well known fact. It is equally well known fact that the legislation in this field undergoes so frequent changes and amendments, that it is not possible even for a specialized person to claim that he knows what exactly the law is on particular given day or period. Only unless by making reference to the history of the enactment. In such circumstance, it would be travesty of truth and justice to hold that the tax payer knew or right to have known the correct law and comply there with, even through, in fact, he was not aware of the provisions.
On 12-06-2004, Government repealed the following rules of different categories of industry and framed new rules for all these categories in a consolidated named as Sales Tax Special Procedure Rules, 2004.
a) The Special Procedure of Gining Industry Rules, 1996.
b) The Ship Breaking Industry (Special Procedure) Rules, 1997.
c) The Special Procedure for Spining Industry Rules, 1999.
d) The Special Procedure for supply of Food Rules, 1999.
e) The Collection and Payment of Sales Tax on the Natural Gas Rules, 1999.
f) The Special Procedure of collection and payment of Sales Tax, (Electric Power) Rules, 2000.
g) The Special Procedure for payment of Sales Tax Rules, 2000.
h) The Special Procedure for Jewelers Rules, 2001.
i) The Zero-rating of Hand-Knotted Carpets Rules, 2001.
j) The Special Procedure for payment of Sales Tax on Sui gas (purchased by Trading Corporation of Pakistan) Rules, 2003.
Keeping in view the above stated vital amendment in the Rules regarding Sales Tax, the question arises whether a tax payer can claim that he was not aware of the relevant provision of said Rules and he has become aware, when he has received a Notice proposing levy of penalty. The Collectorate of Sales Tax normally refuse to accept this explanation on the ground that ignorance of the provisions of the rules is no reasonable cause and accordingly levy heavy penalties. The appellate forums also do not treat it as a sufficient cause for the statuary default committed by the taxpayers. In my opinion the taxpayer deserves some relief, as the Sales Tax Law and its rules for different categories of industry are so complex and complicated it can not be presumed that every tax-payer knows the law. Due to this aspect, the credibility and probability of the taxpayer’s plea can not be brushed aside.
It is a stated principle in jurisprudence that ignorance of law is no excuse and so is recognized in many legal systems. The rule is also expressed in the form of a legal presumption that every one knows the law, the presumption is stated to be irrefutable. Certain reasons have been explained as rendered in the present legal system, and peculiar circumstances of our country where 31% people are educated and only 2% of them can read English, in which language the law is written. It may be remembered that legal maxim originated at a time when the function of the state in most parts was merely to govern the country, by maintaining law and order within the country, and protect it from external aggression. It is observed that certain expatiation on it are being developed, particularly in respect of the defence of “Claim of right’ in criminal law.
Particularly, there is no presumption in this country that every person knows the law, if it were so. The view that every one is presumed to know law is now generally rejected, it is not a true proposition of law and even if were, it would only be a legal fiction, not moral justification. It is a well-known observation of some one, that every body is presumed to know the law except judges of a Court, who have superior Courts set-over them to put them right.
The Supreme Court of India held that the liability to pay penalty does not arise merely upon proof of default, in complying with the statutory requirements and an order-imposing penalty for failure to carry out a statutory obligation. This being the result of a quasi criminal proceedings, will not originally be imposed unless the party obliged either acted deliberately in defiance of law or was guilty of conduct, contumacious or dishonest or acted in conscious disregard of its obligation, and penalty failure to perform the statutory obligation, it is stated, is a matter of discretion of the authority competent to impose the penalty will be justified in refusing to impose it when there is a technical or venal breach of provisions of the Act or where the breach flows from a bona fide belief of that the offender is not liable to act in the manner prescribed by the statute. In another case Supreme Court of India has observed that ignorance of law is certainly not an excuse but there is no presumption of law also that every body knows the laws.
In another case reported as the taxpayer pleaded ignorance of law, which was accepted in criminal law proceedings and so it has been stated that: “the view that everyone is presumed to know the law is now generally rejected.
In another judgement of England it was held that “ there is no presumption in this country that every person knows the law, it would be contrary to common sense and reason if it were so”.
If a defendant were allowed to escape legal responsibility for his acts, merely by saying "I didn't know it was wrong/illegal", the system of using law to regulate human conduct would collapse. So the doctrine is a practical necessity.
This doctrine still has vitality and validity today thus.
however return has to be filed by July 31 of next year...
so for eg...
your adsense income from april 1, 2005 to march 31, 2006 (known technically as previous year) will have to be filed for the assessement year 2006-2007 (assessement year is year immediately following previous year; in our case 2006-2007)
by the due date for filing of return of income u/s 139(1) which is generally july 31 of assessment year in case of individual assesses.
so it would imply that BY july 31 2006 u have to report ur adsense earnings from april 1 2005 to march 31 2006...
however, this deadline of july 31 generally gets extended every year by two-three months which gives u additional period...
in case u have not filed ur return of income by july 31, 2006 (assuming period not extended) u can still file thereafter u/s 139 (4) called as "belated return"
but this is not desrirable for many reasons...
if u wish i can outline here why its not desirable...
but my best advice...again file within july 31, 2006 as u get sufficient time from april 1, 2006 to july 31, 2006...
hope it helps u a little bit,
disclaimer: this is not professional advice; just a friendly advice (meant for lawyers ha ha ha)
i have basic tax knowledge...
but then one of the fundamental canons of taxation proposed by adam smith on which tax structure of most countries are based is "direct taxes have no quid pro quo" which means:
u do not derive any direct benefit for paying taxes...that means that if u pay x amount of money as taxes u cannot get x amout equivalent of benefit from Govt. flowing to u...
This is unlike say a particular tax like toll where govt taxes for providing a particular benefit to u everytime u enjoy a particular service...
this is the legal position...which means i am not talking about the ethical side of it, whether it is justified or not...
but as a measure of abundant precaution atleast pay some taxes even if u intend not to pay full taxes so that u r a taxpayer atleast...
this means when u r caught for avoiding taxes atleast u can take a plea that u always had intention to pay taxes and u did pay something to the best of ur ability and knowledge...its just u did not compute proper amount...so u should be treated favourably and a chance should be given...this way u will have a basis to defend yourself...
(i guess there is no govt official here hahaha...)