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I am a women freelance digital content writer,working for  Overseas client. My Annual Income is 8-10 Lacs. How should I structure my savings and expenses to reduce my Income Tax?
Asked 8 months ago in Income Tax from GURGAON, Haryana
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
Vidya Jain
CA, Kolkata
638 Answers
15 Consultations

4.8 on 5.0

is it salary income or income from freelencing
Vidya Jain
CA, Kolkata
638 Answers
15 Consultations

4.8 on 5.0

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.
Abhishek Dugar
CA, Mumbai
3576 Answers
162 Consultations

5.0 on 5.0

Kindly note if it is salary income , then no additional deduction is allowed except the taxfree allowances.
Vidya Jain
CA, Kolkata
638 Answers
15 Consultations

4.8 on 5.0

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
Abhishek Dugar
CA, Mumbai
3576 Answers
162 Consultations

5.0 on 5.0

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
Abhishek Dugar
CA, Mumbai
3576 Answers
162 Consultations

5.0 on 5.0

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.
Lakshita Bhandari
CA, Mumbai
2243 Answers
81 Consultations

5.0 on 5.0

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.
Nikhil Khanna
CA, Mumbai
1426 Answers
19 Consultations

4.8 on 5.0

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
Damini Agarwal
CA, Bengaluru
269 Answers
13 Consultations

5.0 on 5.0

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.
Vivek Kumar Arora
CA, Delhi
1718 Answers
51 Consultations

5.0 on 5.0

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 .
Swati Agrawal
CA, Indore
689 Answers
1 Consultation

5.0 on 5.0

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