How do I optimize my IT payment

You should opt for 44ADA and thereby 50% of your total receipt will be considered as Gross total income considered for taxation. You should invest in 80C Tax saving instruments upto Rs 150000. to save your taxes

is it salary income or income from freelencing

Hi,

Are you in employment with the client or you are working as freelancer.

I am confused because you mentioned yourself as a freelancer and than you are writing about Salary.

Kindly note if it is salary income , then no additional deduction is allowed except the taxfree allowances.

Ideally, if you are working as freelancer, you can deduct all the expenses incurred for carrying on business:

1. Rent

2. Electricity

3. Communication charges

4. Marketing expenses etc.

Please feel free to call/ revert in case you need more clarity.

Thanks and regards

Abhishek Dugar

CA CS B.Con

No, you cant deduct these expenses as it's not relating to your content writing services.

I mean you can't say that because you are writing content you are having food otherwise you would not have it.

Please feel free to call revert in case you need more clarity.

Thanks and regards

Abhishek Dugar

CA CS B.Com

Hi

Please clarify whether you are salaried employee or working personally on freelance basis.

Rent paid to your mother can be claimed as expense in both the scenarios. However, food etc cannot be claimed.

Hi,

Please note that if it a salary income, you will not be able to claim any expenses other than the normal deductions that Income tax allows.

However, if you are working as a freelancer, then you can claim the expenses that can be directly shown to be associated / related to your work eg rent, mobile expenses, etc.

Hope that clarifies.

Regards,

Nikhil.

HI,

The annual income of 8-10 lakhs generally falls under the slab rate of 20% after considering the mandatory deduction of 2.5 lac.

However, you being a content writer can be considered as a professional income/business income. Depending upon the treatment you believe to be correct, following are the ways you may save and structure your income to minimize the tax liability or even make it NIL:-

1. In case, you consider the same to be your professional earnings, you may opt for presumptive taxation and you just need to offer 50% of your income as taxable income

2. In case, you consider the same to be your business earnings, you may opt for presumptive taxation and you just need to offer 6%/8% (as the case may be) of your total receipts as taxable income.

3. Under section 80C, every individual is allowed to calim deduction upto 1,50,000 from the total income. For this, you need to pay premium towards LIC policy, Make an FD for 5 years or invest in mutual funds, contribution in PPF. etc.

4. In addition to the above, you may also get additional deduction up to 50,000 if you contribute in NPS( National Pension scheme).

5. Then deductions are available for medical insurance policies if you pay mediclaims for yourself or parents or children etc.

6. The donations to trusts and charitable societies are also eligible for deduction thereby reducing your taxable income and minimizing your tax liability.

7. The rent you can claim under section 80GG for which a separate form 10BA is also required to be filed with the tax department.

There are many other options available apart from these. However, it depends on how much you report under the income sections.

Thanks

Damini

Dear Madam,

As you are digital content writer and freelancer, income earned by you generally should not be salary. Please check section under which TDS has been deducted so far. In my opinion it is income from profession and not salary income. If it is business income then you can claim all expenses incurred for earning such income. If it is salary then we need to check the salary structure.

As Freelancing comes under professional income so all the expenses associated with work can be claimed as expenses deduction such as mobile,internet cafe ,rent ,etc.

Deduction under sec 80c can also be done to save taxes.Further Mediclaim under sec 80d and Nps up to rs 50000 can also be done for tax saving .