Do Self-employed (freelancer) people have to pay income tax on income (bill value) or on profit (after giving money to third party)? For Example – If a self-employed have earn Rs. 5,00,000 in a year 2014-2015 and given Rs. 2,00,000 to a third party for business supplies. Then does he have to pay income tax on Rs. 5,00,000 or on Rs. 3,00,000?
Menu
Income tax for self-employed - freelancer
Replies (2)
It is not just payment of tax , which a freelancer in India is supposed to understand in terms of his/her legal liability.
Let us first deal with your income tax problems
- If you earn above Rs 2 Lakh for Fy 2014-15, it is mandatory for you to file return of income u/s 139 of the Income tax Act.
- It is also mandatory for you to maintain books of accounts .
- It is also mandatory for you to get your accounts audited if gross earning as professional is more than 25 lakhs in a year.
Thus, you need to follow all the income tax rules, normally. And yes, like a common businessman, you will get deductions for the expenses you incurr to carry out your activities.
Hence, as far as common understanding is concerned, your taxable income would be considered is Rs. 3 Lakhs
1) I use to maintain all my financial details including Due, Income and Expense in excel sheet. Is this legally enough to maintain "Books of Accounts" like this?
2) I think I have to pay tax on the income (for freelancer profit) above Rs. 2,50,000. Is this right?
Recent Topics :
- TAX TREATMENT AND ACCOUNTING ENTRIEOF PERQUISITES
- Gifting money to my father-in-law (my husband's da
- GSTR-1 JSON from marketplace exports (Myntra / Ama
- Question on buy back of shares
- Saving corporate tax completely on profit from rea
- Hi experts need some helps
- A query regarding GST and Place of Supply:
- ADT-3 not filed by previous Auditor
- Revising salary on 24Q Q4 FY 25-26
- LTCG: Home Loan Principal Repayment?
Related Topics :
CAclubindia
