Question 1

TDS on Salary: Section 392 (old 192)

Accepted Answer

The most voluminous TDS in India, every employer deducts on estimated annual salary. Most errors in TDS happen here: wrong regime, missed deductions, dual employment. How salary TDS is computed: Step 1, Estimate gross salary for full year. Step 2, Add any other income declared by employee (Form 124, old Form 12BB). Step 3, Deduct loss from house property if declared. Step 4, Deduct allowances (HRA, LTA to extent exempt). Step 5, Deduct Sec 123/126, Income-tax Act 2025 (old Sec 80C/80D) etc. if old regime. Step 6, Compute tax on net income. Step 7, Divide by 12 months remaining = monthly TDS. Common employer errors: (1) Default to new regime without checking employee's declaration. (2) Not collecting Form 124 (old Form 12BB), missing HRA and home loan deductions. (3) Not aggregating other employer salary in job-switch year. (4) Not giving effect to Sec 392 (old Sec 192(2B)) house property loss declaration. Employee duty: Submit Form 124 (old Form 12BB) with proofs by February 28 each year. Declare other income/loss if applicable. If employer TDS seems wrong, check payslip and Form 130 (old Form 16) mid-year.

Question 2

Founder Capital Injection: Compliance and Tax Treatment

Accepted Answer

The most common way businesses are initially funded, the founder puts in their own money. Looks simple, but the legal treatment differs dramatically based on business structure. Pvt Ltd: treated as share capital. Proprietorship: just your own funds. Partnership: partner's capital. Getting this wrong creates loan vs capital issues, interest deduction problems, and gift tax concerns. Right structure by entity type: Proprietorship: Just deposit in business current account. No separate documentation needed, it's your money in your business. File ITR: capital introduced shows in balance sheet. Partnership: as per partnership deed capital clause. Entry in capital account. No separate documentation if within deed provisions. LLP: supplementary agreement if beyond agreed contribution + update capital account. Pvt Ltd: share allotment is the ONLY clean route. Alternatives (director loan) have compliance burden. Pvt Ltd share allotment, the correct process: (1) Board Resolution approving allotment of X shares at ₹Y per share to Director Z. (2) Form PAS-3 filed with ROC within 30 days. (3) Share certificates issued. (4) Share register updated. (5) Form MGT-14 if special resolution. This entire process takes 1-2 days with a CA and costs ₹2,000-5,000 in professional fees.

Question 3

Stripe / PayPal / Razorpay: payment processor tax compliance

Accepted Answer

Payment processors are now a significant IT department data source. Stripe India reports all merchant settlements above thresholds to the IT department via SFT. PayPal India settlements appear in AIS. Stripe Atlas / foreign Stripe: If you're collecting USD through a foreign Stripe entity (US or EU), and then repatriating to India, FEMA compliance is required. The income is taxable in India (you're a resident). Bring it in through official banking channels with proper FIRC. Razorpay settlements: Indian platform. All settlements reportable. If you have significant Razorpay volume (₹10L+/year) and it's not in your ITR, you will get a notice.

Question 4

Is your influencer income a profession or a business?

Accepted Answer

Content creation income is taxed as business/profession income at slab rate. The classification affects two things: presumptive taxation and TDS rate. If "profession" (Sec 58, Income-tax Act 2025 (old Sec 44ADA) eligible): Only if content creation falls under a notified profession. Freelance writers, performers, and artists are listed, but social media influencers specifically have not been notified. Most influencers file as business income (ITR-3 or ITR-4). TDS received: When an Indian brand pays you for a collaboration, they deduct TDS at 10% under Sec 393 (old Sec 194J; professional services) or 2% under Sec 393(1) Table Sl. No. 6(i) (old Sec 194C; advertising/marketing). This TDS appears in your Form 168 (old Form 26AS) and is credited against your tax liability. Books of accounts: If your income exceeds ₹1.5L in any of the 3 preceding years, you must maintain books under Rule 46 (old Rule 6F). Many influencers don't, creating risk in a notice scenario.

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