Updated: Dec 8, 2019
A freelancer is someone who offers their services for a fee and usually with no expectation of a permanent single client, although the working relationship can be ongoing. It's a form of self-employment, similar to operating a home business versus telecommuting. Freelancing income comes into picture when you get hired to work on specific assignments for a specific term and get paid for the work upon completion and submission.
So here are some Important Rights & Regulations For Freelancers In India which are stated as follows -
Freelancer will not be an employee of the company or placed on their payroll and will not get perks (like PF) mandated by the Company Act.
They are not required to go to the office – in fact, they can complete the work at leisure (by the pre-agreed deadline) from any place convenient to them.
Any income that they earn by displaying their intellectual or manual skills is the income from a profession according to income tax laws in India.
Such income will be taxable as “Profits and Gains from Business or Profession”.
Freelancers can deduct expenses they incurred to do the job from their income. These expenses must be directly related to the job you are doing.
Section 80C of the Income Tax Act offers tax relief on certain expenses and encourages taxpayers to save for the future (by giving deductions on investments in financial products).
Expenses that can be claimed as a deduction against income are - Rent of the property; Repairs undertaken ; Depreciation; Office expenses ; Travel Expenses; Meal, entertainment or hospitality expenses; Local taxes and insurance for your own business property and Domain registration and apps purchased to test your product are also allowed as expenses.
If they pay for an expense that is more than Rs.10,000 in cash, such expenses will not be allowed for deduction.
If the total tax liability during a financial year exceeds Rs.10,000, the taxpayer is required to pay taxes every quarter. This is called an advance tax.
Earlier VAT & Service Tax applied to freelancers. Now, these taxes have been replaced by GST.
Referenecs - https://cleartax.in/s/income-tax-for-freelancers
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