Tax saving option for freelancers

1227 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)
Quick Summary
This discussion addresses tax-saving strategies for freelancers, particularly concerning GST and income tax. The freelancer, earning around £48,000 annually, seeks clarification on calculating gross income after GST and options for reducing taxable income. Key points covered include the eligibility for Section 44ADA, which allows declaring 50% of gross earnings as profit, and other deductions available under the old tax regime. The limit for Section 44ADA eligibility is also clarified as £75 lakhs.

  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.

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
14 July 2026
Senior Executive/ Manager

H S SHARMA AND CO

Pune

CA Final

View Details
Company
05 July 2026
Financial Controller

NovumLake Partners

Mumbai

CA

View Details
Company
ARTICLESHIP 30 June 2026
Article Assistant or Paid Assistant

VIKAS VERMA & CO

New Delhi

Others

View Details
Company
13 July 2026
AVP / VP - PCG Advisory

Workforce Connect

Mumbai

MBA

View Details
Company
ARTICLESHIP 28 July 2026
Article/Intern/Semi-Qualified/Fresher B.Com

VNSS & Co

Mumbai

Others

View Details
Company
29 June 2026
Accountant (Finance & Compliance)

TRIEYEZ

Kolkata

CA

View Details
Company
16 July 2026
CA Inter, CA Intermediate, CA IPCC, CA CPT , CA SemiQualifie

Vakilsearch.com

Chennai

CA Inter

View Details
Company
16 July 2026
Manager - Finance & Accounts

Aliens Group

Hyderabad

CA Final

View Details