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Dear Sir,
I am self employed & undertake web development projects on the internet. I have membership on various sites through which I get all my projects. All my customers are from foreign countries. I am free to transfer my earnings to any of my bank accounts. I receive my earnings in two forms:
a) US dollars (I wire transfer it to my bank account)
b) As a Demand Draft (Payable in my city) in indian rupees.
1) What is the benefit I get for bringing foreign exchange into India? I believe 50% of my income is tax free and 50% is taxable. Please tell me how all this works as I have very little knowledge about this.
2) My wife helps me with my work. I am not paying her salary for her help. Can I transfer part of my earnings to my wife's Bank A/c (Her SB A/c is located in a city that's different from our current residence) and show it as her earnings? This way I can build capital in her name and save good amount of money each year. I believe upto 1,35,000 is tax free income for women in india. Would this be illegal? Does this amount to tax evasion? (Please note: She does NOT have a PAN card and is NOT a tax payee till date)
Thanks for the help!
Regards,
Swapnil
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