The 4 lac INR limit discussion-
Service tax is a responsibility of the payer as well as reciever. If a payer
(your client) at any point in the year pays you more than 4 lacs, he is REQUIRED
to cut a service tax. But, if your (the designer) net income from services
crosses 4 lacs any point in the financial year, you are REQUIRED to quote and
collect service tax form your clients.
for the reciever (designer)- he has to consider his own total income from
service to all clients at any point in time in the year, if it crosses 4 lacs =
collect service tax from all your clients, mention it in your tax invoice and
charge it your client.
for the payer (client)- if any payment or total of payments crosses 4 lacs, it
is his responsibitiy to automatically pay service tax.
The tax exemption of 4 lacs is intended for very small scale consultants and
"contract on hire" type of professional who do free lance work up to 4 lacs a
year. I hope you cross that limit very rapidly and all designers grow rich by
doing more business :-)
Cheers,




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Atul N Joshi (Communication Designer- NID 97, Design Research Scholar-
Fabrica-Benetton 2001)
Design Incubator (R&D Labs Pvt Ltd)
Mail to: atul.joshi@...
For more information please visit : http://www.designincubator.com


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