Hey bhagwaan! Ye tax kaise file karoon?
If you’re a freelancer or thinking of starting a freelance business in India this video is for you!
The tax hassles of freelancers are galore, as they just step into the world of building a new business for themselves, they also need to figure out how to go about the legal requirements for starting a freelance business in India.
Fret not, and watch this video to gain a deeper understanding of business registration, tips on getting paid as a freelancer and the taxes in India for freelancers. Sanjana Bhagwat takes a deep dive into the world of taxation for freelancers.
0:30 Business registration
0:53 Tip for TDS
1:07 Registering as a proprietorship
1:24 Tips from a chartered account
2:15 GST for freelancers in India
3:00 GST simplified
3:45 Income tax for freelancers in India
3:53 Tax slab for freelancers
4:35 Freelance contracts
Registration for freelance businesses:
While it’s imperative for businesses with an annual income of more than 20 lakhs to register themselves as per Indian tax laws. The same is not required for new businesses. Only a valid PAN card suffices.
Why go for a basic proprietorship?
The answer lies in the fact that you as a business owner can open a current account with a bank and claim GST on business expenses.
Voluntary GST registration
You first need to assess whether or not taking a GST number would be advisable for your business. The things you need to ask yourself are:
Am I ready to incur the expenditure of a consultant on a monthly basis?
Can you incur the cost of non compliance in case a scenario arises?
Setting up contracts
Drawing a clear and concise contract with your client is of utmost importance, as a freelancer. Details such as compensation, delivery time and negotiables should be clearly discussed and mentioned either on email or on a formal contract.
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Do freelancers need to pay taxes? Do I need
to register my business somewhere? Am I missing something I don’t know about? Don’t worry.
Taxes, GST, registration, in sab words ko sunn ke sabko darr lagta hai. All this can
be especially very intimidating when you are just starting out as a freelancer. Hence,
it is very important to know the legal requirements.
for freelance business in India. GST, income
tax, registration aur payments se jude aap ke saare questions aaj hum in video me answer
karenge. So, let’s start! DO I NEED TO REGISTER MY BUSINESS OR GET A
LICENSE? Let me put this straight. Agar aap as a freelancer
apna business start kar rahe hain, toh apko.
kisi registration ya license ki zarurat NAHI
hai. All you need is a PAN card and you can keep quoting your PAN card number for taxation
purposes as long as your annual income is less than 20 lakh per year. Payment ke waqt
jo TDS deduct hota hai wo aap ke pan card pe process hoga aur apke income tax me reflect
hoga. So you don’t need to worry about TDS.
as long as you’re giving your PAN card number.
So basically aapko kisi tareeke ka license nahi chahiye to start your business as long
as you’re earning less than 20 lakhs but it is sometimes a good idea to get registered
as a basic proprietorship because then You can open a current account in a bank and
issue receipts in your name. This is useful.
in case you want to accept payments more than
10 lakhs. You can claim GST tax credit for your business-related
expenses. Jaise aap ne koi software purchase kiya for your business, toh uspe katne wala
GST aapko wapis mil jaega. What about GST for freelancers? Agar aapki annual income 20 lakhs se zyada
ho, toh aapko GST ke liye register karna padta.
hai. For northeastern states this limit is
10 lakhs. You then need to pay 18% GST on any income earned from your freelance services.
This payment is mostly done online on the GST website. Mostly har service ke liye GST
rate 18% hota hai but for a detailed list about what the rate is for what service, check
out the link in the description. Iska matlab,.
as a freelancer, you should always charge
18% extra on top of your fees to account for the taxes. What about income tax for freelancers? Income tax for freelancers is taxable after
a certain amount. For freelancers, income up to 2.5 lakhs is not taxed. Income between
the values 2.5 lakh to 5 lakh is taxed at.
10%. 5 to 10 lakhs at 20%, and above 10 lakh
at 30%. ITR4 form use karke freelancers apna tax file kar sakte hain. You can use Form
26 AS that is linked to your PAN number, and helps you know all the TDS that has been deducted.
As a freelancer, you may also be required to pay Advance Tax. Advance Taxation is the
payment of taxes during frequent intervals,.
in a given year, instead of paying the tax
once, during a given year. Income Tax Act ke Section 80 ke anusaar aap
1.5 lakhs tak invest kar apna tax outgo kam kar sakte hain. What does that mean? Basically
you can invest upto 1.5 lakhs in tax saving instruments and that portion of your income
will not be considered when calculating your.
tax. Let’s talk about CONTRACTS Freelancing ki sabse badi struggle hai getting
paid. Disputes arise when there is a mismatch of expectations hence drawing out a clear
and comprehensive contract is necessary. As a freelancer, here are a few things to
consider including in your contract. Compensation: The agreed amount that needs
to be paid after completion of work.
Timeline: A deadline set mutually by both
parties Scope of work: Defines the freelancer’s
nature of work during the tenure of the agreement Additional services: Payment terms set by
the freelancer for any extra effort Late payment clause: A freelancer can charge
an interest rate or set any other terms. (this.
is very important as some clients don’t
release payments on the said time) Advance payment: This clause allows freelancers
to charge a specific sum in advance Termination: Circumstances under which the
client can choose to terminate the contract Confidentiality: During the tenure, a freelancer
should not disclose the work information to.
any third party
Privity: Showcases the relationship between the client and the freelancer
Aap ek baar apna contract ka template design ker ke, use alag alag projects ke liye use
kar sakte hain. For small amounts,or for clients you trust, it is ok to have a confirmation
on email. Par bade amounts ke liye, contracts.
ko use kariye. This ensures that the client
will take you seriously and pay you on time. But even if you don’t use a contract, put
down all these terms on email, and ensure that you get a response from your client on
it. So that is it for this video guys. I hope
that answers a lot of your questions about.