Today we discuss about Taxes on Freelancer Income in India. In India there are lot of bloggers or freelancer’s which are working online and earning handsome money through freelancing. Mostly Bloggers are earning through google adsense and some other ad networks. Some of the freelancer providing their online services through freelancer website like or upwork , worknhire and there are lot of other website in India where freelancer got the work from outside India. So Let’s learn about Which type of the taxes imposed on the Freelancer Income in India.

Taxes on freelancer income in india

Taxes on freelancer income in india

There are 2 types of the taxes on freelancer Income in India i.e –

a) Income Tax

b) Service Tax

Income Tax on Freelancer income in India

Income tax basically imposed on the income which is earn by the freelancers. its doesn’t matter that its earn within in India or outside India. so you have to always show your income to government of India by the way of Income Tax Filings in India.

Freelancer Income tax Filings or any other simple sole Proprietorship firm’s income tax filings are the same. in both cases you have to file the taxes mandatory if your earning is more than 2.5 lac in a year.

How to Calculated the Income Tax on Freelancer Income in India

Income Calculation
Basically Freelancer Income is sum of all your receipts from carrying your professional or freelancer work for your clients or advertisements income as blogger. you can use your bank statements or payment gateways or paypal or any other medium which you use to getting payments from clients or ad networks for the add receipts income.

Expense Calculation
There are lot of Expense which is incurred by the freelancer on their work. so they can claim all the necessary expenses as deduction from their income. Following are major deduction from your income –

  • Rent, Repairs, Depreciation on Fixed Assets like Laptop, office expenses, travelling for business etc.
  • Domain Registration Expenses, Hosting Expenses, Server Expenses, Paying to other freelancers or Salary to Employees, SEO or Digital Marketing Expenses or any other expenses which incurred for the purpose of earning the revenue.

Apart from the Expenses you claim the deduction also. Here is the some userful deduction for the freelancers

Example – Calculation of Income Tax on Freelance Income in India

Freelancer Income Tax Calcluation

Source : ShoutmeLoud

How to File Income Taxes For the Freelancer Income in India

  1. Just Signup on the Official Income Tax Website
  2. Create your new account with Pan Card Number and other credential details.
  3. Go to E File Tab on the Income Tax Website.
  4. Just Choose Prepare and Submit Online ITR
  5. Choose the appropriate ITR Forms. Mostly ITR-4S and ITR 1 is available on the utility so as a freelancer purpose you have to always go with the ITR-4 which is used by the Business. you can use ITR4S also but in that you have to show 8% of the turnover as gross income.
  6. Download the Java Utility & File the Taxes.

Alternative Option- You can use ClearTax which is user friendly website to file your Income tax returns or else you can buy affordable and cheap  income tax plans for the freelancer on MyOnlineCA.

Service Tax on Freelancer Income in India

Service Tax is applicable on the freelancer when their turnover or total services billing is more than 9 lac in a year. There is important things i.e turnover is calculated within in India, if you providing your services to outside India then its called Export of the Services. Export of the Services Exempt in India from the Service Tax. so if your billing is more than 9 lac in a year then you have to apply for the service tax registration in India & paying the service tax when your turnover cross 10 lac in a year after the registration.

Apply For Service Tax Registration by the Freelancers

Service tax registration Certification is very important thing for the freelancers in India even if you want to run any business on your brand name like XYZ Services instead of your name, then you can apply for the Service tax registration even if your turnover is less than 9 lac in a year. The Reason is you can easily open a current bank account on the basis of service tax registration certificate on your firm name i.e is also called Sole Proprietorship firm in india. You can learn here about the Service Tax Registration in India.

Hope this Article is helpful for you about “Taxes on Freelancer Income in India“.