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I am a part-time Freelancer providing software consultation to clients in US and Ireland. I also work in an India Software company, which does the tax computation for my salary. (My Company doesn't know about the Freelancing work)

Here are my queries:

  1. How do I directly get my Freelancing amount in my Axis bank account? Do I need to inform my Bank before receiving any such payment? Can my client directly pay in Euros? Earlier I have been getting paid via PayPal but they charge 4.4% which is too much for me.
  2. How do I pay tax for this extra income in India? My company is already doing the Tax computations for my salary. How to calculate that how much tax I should pay for this extra money and where and when to pay this extra tax.

Any help will be appreciated.

Thanks.

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How do I directly get my Freelancing amount in my Axis bank account? Do I need to inform my Bank before receiving any such payment?

Yes you can get it directly into your Axis Bank Account. You would need to inform your client your Bank Account Number, Bank Name and Address and Swift BIC or IFSC Code [Axis Bank website or Branch can tell you]. You can receive credits in Euro's. Upon receipt Axis Bank will automatically convert this into Rupees using standard rate. Your Bank [Axis] may also charge some Bank fees for the wire transfer.

How do I pay tax for this extra income in India?

You would need to treat this as income and add it to total income including salary and calculate tax accordingly. You can pay taxes online using Income Tax India website. You can also approach a CA who would do the tax computation, paying taxes and filing returns for as little as Rs 1000 - 2000/-

Edit:
IBAN is International Bank Account Number. Explain to you client that India does not subscribe to IBAN. Its right now only used by Europe and Australia. Give you normal Bank Account Number. Please call up your Bank / walk into your Branch to get the SWIFT BIC. It will be something like this http://www.theswiftcodes.com/india/page/3/

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  • Thanks for the answer. My Client just asked me share IBAN and BIC numbers. I am not sure what are these? When I googled "Axis Bank BIC and IBAN", i didn't find anything. Could you please help me here?
    – user25127
    Feb 1 '15 at 15:39
  • US Banks also charge quite a lot for international wire transfers (my bank wanted 2% or $75 (whichever was more) for a personal transaction; businesses may be getting cheaper rates), and so the OP's client may well send the amount due less this fee. Together with the fee for incoming wire transfers charged by Axis Bank ($30 for my US bank), the OP may not be all that better off than with Paypal's 4.4%.
    – Dilip Sarwate
    Mar 27 '15 at 13:12