Taxation for Contractual Employees and Freelancers

Shubham | Last updated: 12 November 2020

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Contractual employees and freelancers often face confusion regarding tax filing, as they don't have a traditional employer-employee relationship. Their income typically falls under professional services, taxed under 'Profits and Gains from Business and Profession' (PGBP). Depending on annual gross receipts and profit margins, different filing and audit requirements apply, including presumptive taxation schemes like Section 44ADA for eligible professions.

There is often a certain level of confusion when it comes to contractual employees to file their returns. Do they show their income under head salaries or show under some other head? So income under head salaried is recorded only when there is an employer-employee contract. TDS for the same is deducted u/s 192. However, in the case of contractual employees and freelancers, there is no employer-employee agreement. It usually comes under the ambit of professional services and TDS for the same

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1 Year PLAN

1999

(Excl. of GST ₹359)

BEST VALUE

2 Years PLAN

3499

(Excl. of GST ₹629)

3 Months PLAN

999

(Excl. of GST ₹179)

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About the Author

Shubham

Practice

Hello Everyone Am a practising Chartered Accountant based in Noida. I have a passion for writing and hope to share my articles here and gain knowledge from fellow members. Blog- www.finlens.in

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