Taxation For Freelancers In India | How To Calculate And Pay Your Taxes

Gig workers or freelancers aren't considered salaried individuals. So how are their earnings taxed? Let's find out.

Taxability status

Tax-wise, freelancers are considered self-employed individuals. Their income is taxed at the common income tax slab rates.

Threshold limit

Under the old tax regime, aggregate income over Rs.2.5 lakhs is taxable. Under the new regime, the threshold limit is Rs.3 lakhs.

Deductions and exemptions

Deductions allowed under Chapter VI A of the Income Tax Act and business-related expenses can be deducted from gross income.

Presumptive tax scheme

You can use the presumptive tax scheme under Section 44ADA and calculate tax liability at 50% of gross receipts.

TDS and advance tax

Usually, 10% TDS is deducted from income and you have to pay advance tax if your expected annual income exceeds Rs.10,000 annually.

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