Taxation: Homi Mistry
I worked for a US-based company between 2000 and 2005. I have a savings bank account and some deposit in a bank there. If I transfer that account to the bank's Indian branch, do I have to report the details in my returns?
You have held the account throughout 2011-12. Hence, even if you transfer the balance in the account to India during 2012-13, you should report the prescribed particulars (including inter alia, the peak balance) of such a foreign bank account in your tax return for 2011-12, which is due for filing by July 31. The interest income in this account, if any, should also be offered to tax in your return. However, this requirement would arise only if you qualify as a resident and ordinary resident of India for the said tax year.
When is one called a professional and taxed accordingly? I have recently started freelancing. Will I be called a professional?
The income tax law has not defined a professional. A person who possesses specialised skill(s), knowledge, experience and has undergone specialised training in his field, has obtained a degree from a recognised institute or university and works independently such that he does not have a master-servant relationship, is regarded as a professional (doctor, lawyer, chartered accountant, engineer).
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Income from a profession unlike salary income is taxed on a net basis, that is, gross receipts minus allowable expenses incurred in the course of carrying out such a profession. You are liable to pay tax if the net income from your profession and other taxable income exceeds Rs 2 lakh during the financial year.
The writer is tax partner at Deloitte, Haskins & Sells. The views expressed are his own