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I am a CSE student in a college Andhra Pradesh, India. My friend and I have created a web application to automate hostel payments with which students can pay their bills monthly. We use the PayTM web payment gateway and my SBI account is active for this so every payment will be credited to my account.

The bill payment process is:

  1. Student payments are credited to my account
  2. I will go to hostel department and pay their bill (with a debit from the same above SBI account).
  3. The receipts will be given back to the paid user.

College strength is : 1000

Average bill is: Rs.2400

Our service charge is: Rs.20

Let's assume that 500 people pay their bills each month with our service and that the amount of money credited to my account will be 12 lakhs and the profit will be Rs. 10,000.

My problem is that I don't know anything about tax regulations in India. Will I face any tax issues from the government?

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lets assume on average of 500 people paid bills through our service monthly and the amount of money credited to my account will be 12 lakhs and profit for us would be Rs. 10,000.

My problem is I don't know any thing about tax regulations in India. would I face any tax issues from the government ?

Tax is only on the profit. Rs 10,000/- In reality it can be less than Rs 10,000/- as you can deduct some expense towards maintaining the software etc.

As the turn over is large; it is advisable to register a "Sole Proprietor" company. Open a current account in the name of company. This will keep in keeps books in order.

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