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Calculating tax payable for Mobile Developers

Calculating tax payable for Mobile Developers

A PF of Rs.1,200 was deducted by Aditi’s previous employer. A TDS of Rs.2,000 was also deducted.

A TDS of Rs.1,200 was deducted by the bank on her fixed deposits. Aditi purchased a life insurance policy for Rs.50,000. She also has a PPF account in which she contributed Rs.60,000 for this year.

Aditi also took out a health insurance policy and paid a premium of Rs 12,000. She also invested in an ELSS fund for Rs.25,000 on recommendation from her friend.

This is how Aditi’s tax will be calculated for the year:

Investments eligible for deduction under section 80C

  1. Life insurance policy premium of Rs 50,000
  2. Investment in PPF of Rs. 60,000
  3. Purchase of ELSS fund of Rs. 25,000
  4. PF of Rs 1,200

Total: Rs.1,36,200

Other taxes applicable to Aditi

Service Tax: If the total revenue from freelancing work is Rs.10,00,000 or less, Service Tax rules do not apply. However, once you cross Rs.9,00,000 in revenue it is mandatory to apply for service tax registration.

Service tax is not applicable when services are exported.

Therefore, at this stage service tax is not applicable to Aditi.

VAT: VAT is not applicable in this case since there are no physical goods being sold.

TDS: The Indian Payment Gateway charged Aditi Rs. 24,000 as commission fees in the month of March. Aditi has made a payment of Rs. 24,000 to the Payment Gateway for its services. According to law, Aditi has to deduct TDS on this payment

Calculating tax payable for Mobile Developers

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