Set the right rate, plan your monthly revenue target, know exactly how much to set aside for tax & GST, build your savings as a freelancer — all in one place.
When you freelance, your invoice amount is NOT your income. You must mentally subtract: income tax (30% at higher slab), GST collected (18% on services), business expenses, and the value of benefits you now pay yourself (health insurance, PF, paid leaves). A ₹2L/month freelance revenue may leave only ₹1.1–1.3L as real take-home after all these deductions.
GST registration is mandatory if annual income exceeds ₹20L (₹10L in special category states). For freelancers working with foreign clients, GST registration is advisable even below the threshold — exports are zero-rated, allowing you to claim IGST refunds on inputs. Without registration, you cannot charge GST to Indian corporate clients who need tax invoices.
Section 44ADA (Presumptive Taxation for Professionals) allows freelancers in specified professions (tech, design, consulting, writing, etc.) to declare 50% of gross receipts as taxable income — without maintaining books or getting audited. For incomes up to ₹75L. Tax = 50% of receipts × your slab rate. Simpler than regular filing and avoids audit. Best for those with low actual expenses.
Freelancers need larger emergency funds (6–9 months vs 3–4 for salaried), no employer PF so must self-fund via NPS/PPF/ELSS (NPS gives additional ₹50K deduction under 80CCD1B), no employer health insurance so must buy personal cover, and must pay advance tax quarterly. Treat your freelance business as a company — separate business account, track invoices, and set aside tax from day one.
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