• I am a freelancer. How to pay taxes?

Hello,
Basically I am a freelance web designer and data management expert who just started to work since April 2018. I work with multiple clients. 
The problem here is my income is not fixed. This month I may earn 1 lakh but in the next month it would none. Like this my income isn't fixed which could vary through out the year. Also heard that I need to pay advance tax. How to claim deductions like electricity, internet bills(if possible) etc.
How to calculate and pay taxes online? Which website? I am new here.
Detailed and step by step information is highly preferred.
Asked 6 years ago in Income Tax

Hi

For income tax purposes, advance tax can be calculated on the basis of expected annual income. Advance tax becomes applicable if your expected annual taxes are above Rs. 10000.

You will need to estimate annual income on the basis of income already earned in the year and pay advance tax accordingly. Calculations may be done by you or we may help you with it on a separately chargeable basis.

Expenses which are directly related to you business shall be allowed as deductions.

For GST, you don't need a GST registration till your turnover exceeds Rs. 20 lacs.

Lakshita Bhandari
CA, Mumbai
5687 Answers
908 Consultations

5.0 on 5.0

Dear Sir,

From the total income, you need to claim deduction of all expenses incurred for earning the above income to calculate the profit element. On the profit element, you need to pay advance tax online in four installments starting from 15th June.

I may assist you in calculation of profit. Need details of total of income and expenses on estimated basis to calculate profit.

Thanks

Vivek Kumar Arora
CA, Delhi
4825 Answers
1030 Consultations

5.0 on 5.0

You will need to estimate your yearly income and if your total tax liability will be more than 10000, you will need to pay advance tax online (IT Site) in a quarterly phased manner.

Regards,

Nikhil.

Nikhil Khanna
CA, Mumbai
1429 Answers
19 Consultations

4.8 on 5.0

Hi,

You have two options:

Option 1 Normal taxation

1. Firstly you need to estimate your income for the entire year and related business expenses for the year.

2. Then you will have to prepare your projected P&L and derive projected profit.

3. Calculate advance tax on the projected profit as per the slab rate(5%, 20% and 30%).

Option 2 Presumptive taxation

In this scheme, you can directly consider 50 of your gross income as your profit and pa tax accordingly. It is easier and you dont need to maintain books of accounts.

For more information on advance tax refer below link:

https://www.charteredclub.com/advance-tax/

Please feel free to call me for more detailed discussion

Abhishek Dugar
CA, Mumbai
3576 Answers
183 Consultations

4.8 on 5.0

Hii

there is two type of Taxes applicable

1 Indirect Tax GST

2 Direct Tax Income Tax

GST when your Receipts cross 20 Lakh in a FY ( April to March) then you have to registered under GST

Income Tax - Your receipts less exp. is your income for taxation purpose as you said your receipts is not fix thus you have to wait for at least September so that you can able to know what is your income for half year , after that you are able to calculate next half year income and accordingly can pay tax, advance tax is applicable if our income tax liability is more than 10000

Lalit Bansal
CA, Delhi
773 Answers
61 Consultations

5.0 on 5.0

We will fall under the definition of Professional providing technical Consultancy. Thus we can opt for section 44 ADA where we can take minimum 50% of our Income as Net profit. ( Note : If you want you have got leeway to take Net profit as more than 50%). IF we opt for 44ADA, we will not be required to maintain books of accounts. but we will be subject to advance tax Due dates as follows :

before 15th June : pay 15% of advance tax.

before 15th september : pay 45% of advance tax

before 15th december : pay 75% of advance tax.

before 15th march : Pay 100% of advance tax.

For calculation of Tax payment & submission of return. Please get in touch.

If you like our consultation- Please give consultation rating.

Chirag Maru
CA, Raipur
210 Answers

5.0 on 5.0

1.Advance tax is calculated on expected income for the year.

If your expected total tax liability is more than 10000 then only you need to pay advance tax.

2.All the expenses related to business can be claimed as deduction while calculating net profit.U need to have bills for the same.

3.You can refer Income tax website for payment of Taxes.

Swati Agrawal
CA, Mumbai
1146 Answers
7 Consultations

5.0 on 5.0

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