A guide for filing income tax returns for freelancers

A guide for filing income tax returns for freelancers


Do you want to file your income tax returns as a freelancer? You don’t know anything about it?Don’t worry at all! You have come to the right place at USTAXFiling.in where our experts help you to e-file your income tax returns as a freelancer. Click on this guide to know more details about it that include:


A guide for filing income tax returns for freelancers


It becomes easier for a salaried person to file their income tax returns. The organization HR authority sends Form 16, guidelines and reminders about income tax filing deadlines and tax-saving obligations. But, it is slightly difficult for consultants and freelancers to pay their income tax returns as they have multiple sources of income and have more than one customers.



Here, we have tried to help you know the process for income tax filing as a freelance professional and how easy it can be for you to file your income tax returns if you know the process better.


What constitutes a freelance income?


The income of a freelancer professional varies on their assignment and primarily are contract-based tasks for organizations and companies.


Income tax laws in India state that revenue generated by an individual through any intellectual or manual skills as an income from an occupation or profession is a taxable income. The income you earn is the total of all receipts that you get from your customers.


You can be holding any of the position such as Social media manager, Consultant, Designer, Photographer, Designer, Web developer, Digital marketer, Vlogger or a blogger to be eligible as a freelancer professional for taxation purpose.


Rules and regulation of Freelance Taxation:


According to the provision of Section 44ADA below the Income-tax Act, 1961, a resident taxpayer of the country who is engaged in a prescribed profession such as technical consultancy and engineering and whose total gross receipts do not cross Rs 50 lakh in a financial year can provide the income from such profession to tax based on a presumptive.


The taxable income shall be supposed is 50% of the total gross receipts during the financial year from such profession or it might be a sum higher than the aforenamed sum hold to have been earned by the taxpayer. According to the provisions of section 44AA, every person who carries on a prescribed profession should maintain books of accounts.


If the income from the business is other than prescribed profession crosses Rs 1.20 lakh, they need to maintain books of accounts. Further, according to the provisions of Section 44AB, tax audit for business income is needed to be done if the gross receipts or turnover of the business crosses Rs 1 Crore.


Freelancer from a tax purview


When you make money from a manual or intellectual work, your income comes under profits and Gains of Profession and Business. From a tax viewpoint, you have to think of yourself as a business individual. You have customers the way a business holds clients and you have to pay taxes on the income earned from different customers.


TDS is deducted from your payment


Every professional service offered by you is subject to 10% Tax deducted from source or TDS under Section 194J of the Income Tax Act. You can declare a refund of tax deduction scheme as your salaried friends can do it.


Claiming expenses reduce the liability of tax


You can declare the expenses you incur towards your work to decrease your tax outgo. These expenses can be repairs, depreciation, office expenses, meal, rent, entertainment, hospitality and travelling expenses. Each of these heads can be declared as an expense to reduce your tax liability. Isn’t it a great option?


Which Income tax returns To File?


As a consultant or freelancer, either income tax returns 3 or 4 applies to you since your income will be considered as income from profession or business. Professionals who go for the presumptive scheme of taxation can claim 50% of their gross receipts as their income by filing income tax returns-4.


To sum up, given the number of cases, work-related expenses are more, it is recommended to opt for the presumptive scheme of taxation.


USTAXFiling.in provides affordable pricing plans for independent consultants and freelancers. We ensure to offer you a hassle-free experience. Our experts are available for you to 24*7 to help you in every possible way. Contact USTAXFiling.in for your filing your freelance income tax returns now!

Table of Contents