I am resident of India and I work as a freelancer, developing software for Indian companies. Sometimes, I do the work along with a few other professionals like me. I receive the payments into my bank account and then disburse it to others based on pre-agreed hourly rates or fixed sums.
Please note :
- I receive money as Professional Fees and NOT contract amount.
- I do not have a company registered for the purpose.
- I have no TAN myself and have not withheld any tax for payments.
- The total amount involved is < 10,00,000 for the entire year.
Now my questions :
In my income tax returns, how do I account for these pay-outs ? As payment to sub-contractors OR payment of salaries OR is there another way ?
Do I need to maintain invoices I send to the clients and do I need to receive invoices from my colleagues ?
Thanks for your help.