How to reduce tax on additional income done due to freelance consulting

For freelance consulting, you can avail the benefit u/s 44AD/44ADA. Showing it as a wife income will be wrong reporting.

If the amount has been received in your account it is better to show in your return of income or else you can take a risk and show it in your wifes return and save some tax. What kind of freelancing have you done.

I would suggest you to change the account to your wifes account and from next year show it as wifes income.

Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.

Thank you.

Hi Husain,

Hope you are doing well !!

Sec 44 ADA is a pretty attractive section for freelancers.

It will basically assume 50% of your gross receipts as your Gross total income (~12 l x 50% = 6 L in your case). Moreover, you could still avail deductions under section 80C-U, so this might further reduce your taxable income. You need to pay tax on Rs ~6L if you do not have any other deductions.

On availing this section, you would not be allowed to claim any other business expense, also you would not be required to maintain any accounting records

Note: This section is available to a specified list of professionals

Hi Husain,

She cannot show this income as her income. You will have to show this in your return.

However, we can certainly reduce your tax burden if your services fall s within specific nature if services. Please let us know hat kind of services you provide against your consultancy income.

Hi,

You can file it online through efiling portal.

We may help you in filing procedure.

Hi Hussain,

As mentioned in my earlier response 44ADA option is available only for specific nature of services. So , please let us know tHe nature of services.

44ADA is available to limited people as per the list so you should first check if you fall under it or 44AD.

Hello,

You don't have the option to show this freelancing income as your wife's. That would be inappropriate.

You can use the presumptive taxation scheme under Sec 44AD or 44ADA to reduce your tax liability. Provide the nature of your freelancing service to check if you are covered in either Sec. 44AD or 44ADA.

I hope this answer satisfies your requirement.

Regards,

CA Hunny Badlani

You can get all the details on the income tax portal.

For return filing, you can contact us directly.

Hi,

Yes we can assist you in the same.