Can I receive payments (EUROS) from my International clients in my savings bank account in India for my business services

Question

I am starting a small international outbound sales campaign and will be selling my web development services. 100% payment will be received in Euros through wire transfers in a bank account or through Paypal linked with my bank account.

1. Can I use my Saving bank account to receive payments from my clients? Or is it necessary to open a current account?

2. I will be paying a certain % as commission on every sales to a couple of sales guys (who are not my employees but only working on commission). Can I show this as an expense in my IT returns?

3. Since I will be receiving all the payments in Euros so am I falling under a category of "Exporter of services"?

4. Do I need an Import Export Code (IEC) for smoothly running this small business?

Answer 1

Paypal linked with my bank account.

1.Can I use my Saving bank account to receive payments from my clients? Or is it necessary to open a current account?

Yes you can get funds into your savings account. However it is advisable to keep a seperate account as it would help with your IT Returns.

2.I will be paying a certain % as commission on every sales to a couple of sales guys (who are not my employees but only working on commission). Can I show this as an expense in my IT returns?

As you are earning as freelancer, you are eligible for certain deductions like Phone calls, Laptop, other hardware, payments to partners. It is important that you maintain a book of records. An accountant for a small fee of Rs 5 K should be able to help you. In the Returns you have to show Net income after all these deductions, there is no place to enter expenses.

3.Since I will be receiving all the payments in Euros so am I falling under a category of "Exporter of services"?

The work you are doing can be Free Lancing.

4.Do I need an Import Export Code (IEC) for smoothly running this small business?

You can run this without one as Free lancing. IEC would be when you grow big and are looking for various benefits under tax and pay different taxes and are incorporated as a company.