What are the applicable tax rules for freelancers in India?

filing ITR

a freelancer One can only opt for ITR-3 or ITR-4 for filing Income Tax Return (ITR).

Even if a salaried person has earned any income from freelancing outside his job in a particular financial year, he has to opt for the qualified ITR form for those having income from business or profession.

Like business income, taxpayers with freelance income also have the option of deducting from their income expenses that are incurred for doing freelance work.

These deductible expenses include rent on property that you may have taken over to do the work and the cost of any repairs you have made on such property, any repairs made on electronic equipment such as laptops or personal computers that you may have used to do the work. The pass is for work, office expenses such as purchase of supplies, internet bills and phone bills, expenses related to travel for work, transportation bills to and from office/co-working space and laptops to be used in this regard such as the depreciated value of equipment.

For expenses that may qualify personally, such as phone bills, you can allocate a portion of the expense to business use in order to claim the deduction.

Freelancers are not allowed to claim 50,000 standard deduction while filing ITR.

However, if you have held a regular job and also done freelance work in a financial year, you can claim standard deduction on salary income.

tax calculation

The taxpayer must determine his income in a financial year from different sources and deduct the expenses and eligible tax breaks to arrive at the tax payable.

Note that most employers deduct TDS on payments made to freelancers, so include TDS while computing tax liability.

People with freelance income have to pay advance tax every quarter within the due date when the net taxable amount is above 10,000.

If the total tax you calculated comes up to 10,000, you have to pay interest on it as per Income Tax Law.