Doubt regarding Section 44ADA for Upwork

999 views

Save Share

Satwik Mishra

30 Points Posted on 04 March 2022

I'm a salaried professional in the 30% tax slab and I'm also a freelance writer ( topics: engineering, technical, medical etc) on Upwork. The services are based on client requirements and I also edit other technical articles along with providing writing services. My earning through upwork is less than 50L. Upwork also deducts 1% TDS which reflects in Form 26AS. The code is 194 O for this.

Q. Is it possible to use the section 44ADA to reduce the amount to be taxed to 50% of my freelance earning?

Q. If yes, under what category can I avail this? Will 'engineering and technical consultancy' be okay for this since I mostly write/edit/proofread technical articles.

Thank you.

Replies (7)

Quick Summary

A freelance writer earning through Upwork, who also works as a salaried professional, is seeking clarification on using Section 44ADA for their freelance income. They primarily write and edit technical articles, and their Upwork earnings are under 50 lakhs, with TDS deducted under section 194-O. The main query is whether they can declare their freelance income under Section 44ADA, specifically under the 'engineering and technical consultancy' category, given the nature of their work and the absence of a specific category for writers.

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

121521 Points Posted on 04 March 2022

Yes to both ....

Satwik Mishra

30 Points Posted on 04 March 2022

Thank you for your reply, sir. I heard some conflicting views that it's not possible etc or that 194 O cannot be used etc. The only issue is that there is no specific category. So I'll go ahead and put it as technical consultant. Hope that'll be okay and it won't be rejected?

CA. Abhilash Krishnan P

Chartered Accountant

325 Points Posted on 04 March 2022

Even though tds under section 194O is being deducted you can go on and declare your income under section 44ada if its a specified profession under the section

Satwik Mishra

30 Points Posted on 04 March 2022

Thanks for your reply, Abhilash sir. My query was that since I'm a technical writer, is it okay to use the 'engineering and consultant' category for the same? That's because I edit, proofread, fact check all the technical details and also write a few for the client when necessary. Since there is no special category for writers is it alright to use the category of technical consultant for this purpose?

CA. Abhilash Krishnan P

Chartered Accountant

325 Points Posted on 04 March 2022

But whatever you're writing is related to technical domain only right?? not any literary work..so you can go ahead..since its a debatable topic..consider this as my personal view..

Satwik Mishra

30 Points Posted on 04 March 2022

Yes. It's related to computer science, mechanical engineering, civil engineering, finance and mamagement and some soft skills. All of these are formal articles written for job sites and technical websites. None of them are literary or informal. Hopefully that'll be fine?

Satwik Mishra

30 Points Posted on 04 March 2022

These articles are used by sites like Indeed as career guide, technical information, guides for students who want to pursue engineering, law, finance or medicine and articles on upcoming technologies like machine learning, cloud computing, virtual networks etc. So all of this loosely falls under the 'engineering and technical consultant' category. Thank you.