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I am working for UK company from India as a contractor from 1 Jan 2016. UK company will pay me in pounds. My query is what is best approach to get money in India? I was given few suggestions

  1. Work under UK umbrella company. Show minimum salary in UK and NI will also get paid and then transfer remaining dividend amount to India in personal account or proprietor account(? not sure the difference).

  2. Ask UK company to remit money to Indian savings bank account

  3. Ask UK company to remit money to Indian business bank account

Could I request which will be the most tax saving method from above 3? Kindly reply

Best Regards,

Rahul

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Work under UK umbrella company.

By this you are thinking of creating a new legal entity in UK, then its not a very great idea. There will be lot of paperwork, additional taxes in UK and not much benefit.

Ask UK company to remit money to Indian savings bank account
Ask UK company to remit money to Indian business bank account

Both are same from tax point of view. Opening a business bank account needs some more paper work and can be avoided.

Note as an independent contractor you are still liable to pay taxes in India. Please pay periodically and in advance and do not wait till year end. You can claim some benefits as work related expenses [for example a laptop / mobile purchase, certain other expenses] and reduce from the total income the UK company is paying

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