know all about income tax on freelancer income

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Freelancers are self-employed individuals who manage various jobs for various clients while relaxing in their homes, parks, or café. Independent contractors or freelancers exist in many industries, including social media content writers, website designers, consulting firms, and marketing. However, this convenience is not without cost because, by the Income Tax Act, freelancers are also required to pay taxes to the government for their earnings, just like other business owners or paid employees.

Let’s know all about ITR filing  income tax on freelancer income.

What is Freelancing Income?

When you are hired to work on determined jobs for a specific period and are compensated for your efforts after completion and submission, this is when freelancing income enters the picture. Benefits required by the Company Act, such as PF, won’t be given to you. You do not need to come into the office; instead, you can finish the work at your convenience (by the set deadline) from anywhere convenient for you.

Income Tax on Freelancer Income

In India, income tax regulations define “profession” as any source of income-you obtained by exercising your intellectual or manual talents. Such earnings will be subject to “Profits and Gains from Business or Profession” taxation. Your total receipts from practicing your career will make up your gross income. Your bank account statement is a record you may rely on to glean this information if you have collected all of your professional revenue through banking channels.

The Income Tax Taxation Slabs: What Are They?

People who work as independent contractors are subject to identical tax slabs. Incomes under Rs 2.5 lakh are not subject to taxation; however, incomes between Rs 2.5 lakh and Rs 5 lakh are subject to taxation at a rate of 10%, between Rs 5 lakh and Rs 10 lakh at a rate of 20%, and over Rs 10 lakh at a rate of 30%. There are also GST taxation rules applicable to freelancers in India. You can learn more about it at: Easy and Complete Guide on GST Registration for Freelancers in India

Filling out income taxes as a Freelancer

The straightforward methods for filing taxes as a freelancer in India are as follows:

  • Go to the income tax e-filing website.
  • ITR- 4 can be downloaded via the downloads tab.
  • Fill out the ITR-4 form completely. Fill out basic information, total gross income after deductions and taxable income, information about revenue from a business or profession, information about TDS, and information about advance tax and self-assessment tax etc.
  • Apply Form 26AS to your tax calculation. For tax savings, various sections allow for tax deductions and exemptions. Any cost that was solely and entirely incurred for the freelance work completed during the tax year may also be deducted, including rent on real estate, maintenance costs, travel costs, municipal taxes on real estate used for commercial purposes, and domain registration costs, among others.

For better savings on taxes and filling out the income taxes correctly, it’s best to consult a professional Chartered Account. You can also contact our professional and experienced team of CAs, Cost Secretaries, and lawyers at: 8881-069-069. 

The GST’s Applicability

Before, freelancers had to pay taxes like VAT and service tax. However, GST has replaced the previous taxing system. GST is the tax imposed on the goods or services you provide. Freelancing so fits under the definition of service. The majority of the services are therefore subject to GST at 18%.

Where the work is performed, freelancers are responsible for CGST, SGST, and IGST. No GST exemption is possible, even if the business is conducted online. Bloggers are subject to GST regulations whether they sell blog space locally or interstate. So Gst Registration for freelancers is very crucial.


Freelancers take on various projects and earn money from domestic and foreign services; as a result, figuring out how much taxes to pay and how to avail taxation benefits from the income can be challenging. It is always advised to get professional counsel to prevent tax fines and take advantage of any possible tax exemptions.

Take a call from Expert

Easy and Complete Guide on GST Registration for Freelancers in India

Moreover, you require any kind of guidance related to the Income Tax Return Filing, please feel free to contact our business advisors at 8881-069-069.

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