Tax saving option for freelancers

1178 views 8 replies

Hi,

     I am working as a freelancer for a start-up. My invoice has both project fee and GST (18%) mentioned. I collect both of them and pay back GST every month. Need clarifications on the below:

  1. Should I calculate my gross total income is (Total payment - GST) ?
  2. My Gross total income from the company is expected to be ~48 lakhs. So can someone please suggest better options to save Income Tax?
    1. Subtract business related from expenses(Salary, rent, travel, etc.,) from the Gross total income and estimate the taxable income.
    2. I heard that there is an option to declare only 50% of Gross total income as taxable income. Am I eligible for this?
    3. Should I estimate both of the above and choose one of them. Or Is it possible to avail both the above - business expenses deduction and 50% exemption benefit?

Thanks in advance.

Thanks

Mani

 

Replies (8)
  1. Yes, correct.
  2.  i. Yes, under normal assessment.  ii. Eligible if you are eligible for sec. 44ADA IT act.  iii. You can be eligible for either of the options.

Thank you sir for quick response. Also I welcome your suggestions for better tax saving options , if you have any.

Sec. 44ADA, if eligible, is the best option by declaring minimum 50% gross earning as profit. Other deductions ;ike 80C, 80D etc. are common under old regime. Under new regime no such deductions allowed.

Thank you very much sir for your quick responses.

You are welcome.           

Sir, 

    One more question. I am getting my entire project fee through Online payment - NEFT. What is the limit on my Gross income (Total income  - 18% GST) to avail sec 44ada ? Thanks in Advance

Thanks

Mani

 

 

 

Rs. 75 lakhs...           

Sir, I am residing in TamilNadu offering IT freelancing service to my client company registered in Karnataka. I did GST registration when my threshold was about to cross 20lakhs. All my invoices before GST registration didn't have GST number. So did I follow proper procedure to avail the benefit of not paying GST till 20lakhs.

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