Tax query for a freelancer

TDS 571 views 9 replies

Hi All,

Apart from salary income, I also earn some money by working as a freelancer. I have two questions regarding that - 

1. How much TDS is my client supposed to deduct where I work as freelancer ?

2. For work done in Jan-March'15, I'll be paid in April'15. In which FY will this income be added to my taxable income ?

 

Regards,

 

Replies (9)

1. If it is professional consultancy, TDS @ 10% (provided the total amount exceeds 30000 in a year)

2. Income is taxable on the date when it is accrued or receipt, whichever earlier. So in this case, it will be taxable in FY15 for work done b/w Jan-Mar 15.

Thanks Poornima. For #1, I work as an individual consultant. How much tax needs to be deducted ?

Regards,

10% TDS is deductible

Thanks Poornima. My client's company was setup only 6 month before and they don't have a TAN. Can they still deduct the tax ?

Tell them to apply for tan n deduct TDS. If Deductor is individual or huf, then exemption is available provided tax audit is not applicable

It's a propreitership. Is it treated same as individual ?

Yes, then if tax audit is not applicable, then no need to deduct TDS

I am impressed by your candid, quick and knowledgeable response.

My father worked as an employee til 14th Feb 2015 and since then as Consultant/Advisor for the same company. They have deduced still 10% TDS. His income falls in 30% tax bracket. 

For this year assessment and coming years, how shall we legally and technically show our expenses which can be exempt from taxable income for a Consultant/Advisor/Freelancer.

Your guidance will help in this regard very much. Also what corresponding documents apart from the bills, transaction slips are required for documentation/record keeping purpose.

Please advise.

Thanks & Regards,

Vinay

Thanks. If amount paid/payable during a FY exceeds ₹30,000, TDS @ 10% will be deducted by the payer. You can adjust this at the time of filing ITR.

You can show all related expenditure for consultancy, to name a few telephone, mobile phone, broadband, conveyance, travel etc. Any legitimate expense related to consultancy is deductible. You need to keep the bills/vouchers etc for the expenses that you show as incurred, for record purposes. 


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