Which is better for me as a new freelancer - GST registration or income tax?

Both are seperate you can't choose which one you need to pay.

Both are separate and you can recover the GST amount from customer so how will it be your cost.

By the way I would suggest you to take GST registration when your receipts cross over 20 lakh. Your export after GST would not cost you anything as export under LUT is zero rated.

But if you take registration before crossing the limit you will have to pay GST on services provided within India.

If you need any consultation or assistance you can call me or mail me. I would love to assist you.

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Thank you

Hi ,

At this time, you must not go for GST registration as it is not required as per law. Also, if you will register for GST, then you will have to mandatorily charge GST on each and every sale without any option and at the end you will end up paying additional 18% GST on your whole year revenue.

Not only this, the compliance burden of GST will also be very high as there are monthly requirement of certain returns to be filed failing which there will be late fee on per day basis.

Taking GST registration unless your cross the threshold of 40 lakhs would not be a good choice from the point of view of finance. Hence it is not advisable for your current business model as of now.

Thanks

Damini

Hi,

- GST and Income tax both are separate laws and one can not replace the other. GST is an Indirect tax levied on the sale of goods or services whereas Income tax is direct tax which is levied on the profit earned during the year from the business.

- In your case, as you will sell the services online domestic and international, you will be liable to obtain GST once the turnover crosses the threshold limit of Rs. 20 lacs.  If you register for GST now then you need to charge 18% on the fees charged by you. 

-As you are working as an Individual, under Income tax you will be liable to tax at slab rates on annual basis.

Thanks

Hi,

Hope you are doing well !!

GST (Goods & Services Tax) is an indirect, consumption-based tax which was implemented in India from July 2017 to replace all the existing indirect taxes, including sales tax, service tax and others.

Income Tax is a direct tax levied on the income/profit earned by Indian citizens.

Both are separate law, you can not choose any one.

However, it is not advisable to take the GST registration untill your turnover crosses the exemption limit.

Otherwise, in order to avoid penalty and further complications, a registered GST payer strictly needs to file a NIL Return even if there was no business activity (i.e. sale/purchase/transaction) during a month.   

Hello Sir,

Income tax and GST are separate laws.

You will have to comply both laws.

As mentioned by you that the expecting revenue of only INR 3-5 lakhs, then there is no requirement get the GST registration as it is within the exemption limit.

Further, every person registered under GST Act has to periodically furnish the details of sales, purchases and tax paid and collected theron by filing return with GST Authorities. Before filing any return payment of tax due is pre requisite otherwise such return will be invalid.

Apart from GST, you need to pay the income tax as per the slab applicable to you.

Hello,

Firstly, GST and Income Tax are two different laws. While income tax is a direct tax on your total income, GST is an indirect tax charged on your sales. So you can't choose which one to pay or not.

As of now, you are not required to get GST registration. Once your sales cross the 20 Lakhs threshold limit, then you are required to get GST registration. If you get registration now, then you will have to compulsorily charge GST from your customer.

I hope this answer satisfies your requirement.

Regards,

CA Hunny Badlani

Hi

Income tax and GST are separate taxes. There's no option to choose. You need to pay both the taxes. GST is an indirect tax- collected from the customer and paid to the government, whereas income tax is a direct tax- paid from your own pockets.

However, you don't need to register for GST till your turnover is upto INR 20 lacs. Only income tax needs to be paid.