Tax on freelancing work ?

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Hello All,

I hope all of you are doing well.My name is Rizwan and i am a Software Specialist by proffession.I came accross this forum from a google search and thought to ask few questions that i have in my mind.Your answers on the below questions would be highly appriciated. Thank You.

So i work in a company as a Software specilist and my annual pakage is 2,74,000 . Apart from this i also work as a freelancer for a US client and roughly make make $100 per week (As i get paid in hourly basis so there is always a fluctuation in my earnings).My US client sends me money through PAYPAL and then it directly goes into my bankaccount after the currecny conversion from DOLLORS to RUPEES. (PAYPAL charge currency conversion rate on every recieved money). My doubts and questions are :

1.I know that there will be 10% tax deduction from my salary that i get in hand. And as you know that i am also a freelancer and get money from that part also , so i want to know if there is any special tax charge on the freelancer work.??

2.I do not take tax from my US client as i don't know how much percentage should i charge him on every invoice.So i want to know whenever i create a invoice for him how much % should i charge?

3.As i said that PAYPAL takes fees for corrency conversion, For e.g. If he send me 180$ PAYPAL takes approx $10 as the fees. So i am getting 170$ in my bank account after currency conversion.So do the TAX apply for all 180$ or i just need to pay tax on $170.??

ANY ADDITIONAL INFORMATION IS MUCH APPRICIATED. SUGGESTIONS AND ADVICES ARE WELCOME.

Thanks All.

Regards,
Rizwan

Replies (2)

Freelancer earning is clubbed with your salary and show as total earnings in INR and you need to pay tax on actual amount received in bank account from paypal to pay Income tax....

Not sure about your second query...

Dear Rizwan,

 

1. There are no special rates prescribed in the Income Tax Act, if your tax liablity is crossed Rs. 10,000/- then you are liable to pay advance tax.( As Individual )

2. As you are providing services, you can charge service tax @ 12.36%.

3. You can claim fees as expenses againsts your income from Freelance work.

For your information, please find attach file.


CCI Pro

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