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I am currently working software engineer in India. Except for salary income. I get income from my facebook app which is very basic amount. For that I use paypal to transfer money to my bank account.

Now I got to know I should be paying income tax for that amount as well. After reading a lot I also got to know that I can show expenses like domain name and hosting fees etc. for saving income tax.

And I guess date to file income tax has passed for this year i.e. 2013-2014.

How should I move ahead? I am extremely clueless? Any recommendations would be greatly appreciated.

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@Dheer - Also how much tax should I be paying? Does my salary slab will be affecting it? My salary slab is 500001-1000000 just in case it will be helpful for guiding me.

  • Get. Legal. Advice. From someone qualified to do that - and licensed to do that. I assume they have tax advisors on India. – TomTom Apr 12 '14 at 6:52
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    Welcome to Money.SE. We welcome new members from all over the world, and have a number of members whom I consider to be experts, from India. Please be patient, you'll see a good answer soon. (If your question were asked for US taxes, you'd see decent answers.) Many people all over the world have side income they need to claim just as you do. @Dheer is a great, knowledgeable member. – JoeTaxpayer Apr 12 '14 at 11:35
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The amount earned is taxable. It needs to shown as income from other sources. Although the last date for paying Advance tax is over [15 March], there is still time to pay Self-Assessment tax till 15 June. If the tax amount due is less than 10,000/- there is no penalty. If the tax is more than Rs 10,000/- there is penalty at the rate of 1% per month from March, and if the amount of tax exceeds 40% of the total tax, there will be additional 1% interest from December.

The tax can be paid online via your Banks website or using the Income Tax website at https://onlineservices.tin.egov-nsdl.com/etaxnew/tdsnontds.jsp The form to be used is 280.

You can use the Income tax website to calculate and file your tax returns at https://incometaxindiaefiling.gov.in/ or use the services of a CA.

Edit: If the income is less than expenses, you need not pay tax. Maintain proper records [receipts] of income and expenses, if possible use a different Bank account so that they remain different from your main account.

The tax to be paid depending on your income slab. The additional income needs to added to you salary. The tax and slabs will be as per this. There is no distinction on this amount. Its treated as normal income.

All Tax for the given year has to be paid in advance. i.e. for Tax year 2013-14, 30% of total tax by 15-Sept, Additional 30% [total 60%] by 15-Dec and Balance by 15-Mar.
Read Page 3 and page 10 of http://incometaxindia.gov.in/Archive/Taxation_Of_Salaried_Employees_18062012.pdf

  • +1 I knew I could count on you, much thanks for your answer. – JoeTaxpayer Apr 12 '14 at 17:43
  • Tons of thanks for your reply. amount is around 30K. How about saving tax like I mentioned showing expenses. I invested whole money in other thing like purchasing domain and hosting etc. I didn't get point of 25% and of December month. Can you please illustrate with an example? – Bharat Patil Apr 12 '14 at 17:47
  • Also how much tax should I be paying? – Bharat Patil Apr 12 '14 at 17:54
  • @Dheer - I tallied earning and spending from Facebook income it is actually going into negative amount. – Bharat Patil Apr 13 '14 at 2:56
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    If your income is less than expenses and can be established, then NO. – Dheer Apr 13 '14 at 6:27

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