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Tax Rules in India for freelancers | Fiverr, Upwork, etc | GST | Income Tax | Accounting
ฝัง
- เผยแพร่เมื่อ 15 ส.ค. 2024
- For Tax related Queries please book a consultancy call from prokhata.com/p...
Income Tax and GST Rules in India for Freelancers as per Budget 2023 | Tax on Export Explained
• Income Tax and GST Rul...
Timeline
00:00 Who are freelancers?
01:14 What is service turnover calculation ?
02:00 How to calculate service turnover of freelancers?
05:25 How to classify the nature of transaction?
11:36 What are the Indirect tax (GST) rules for freelancers?
12:05 Is GST registration mandatory for freelancers ?
13:00 How do freelancers charge GST for work done for foreign clients?
13:24 Consequences of not providing letter of credit
13:54 GST applicability in case of Indian clients
14:11 About Direct Tax for freelancers
14:55 Turnover more than 50 lakhs incase of freelance business
15:48 Section 44ADA applicability for freelancers
19:56 Tax on the basis of slab rate for freelancers
21:40 Which tax regime is better for freelancers Old or new?
Telegram Group for Freelancer Tax India - t.me/freelance...
Whatsapp Group for Freelancer Tax India - chat.whatsapp....
Get Answers to the following questions in this Video
Freelancer Tax Rules in India
Is foreign income taxable for freelancers in India | Tax on Foreign Clients
How to Manage Income Tax with Job And Freelancing
Tax on Freelancers in India: Things To Know
Understand How to Pay Tax As A Freelancer In India | GST, Income Tax, Freelance Tax Benefits
Paying Tax As A Freelancer In India | GST, Income Tax, Self-employment Tax,
What is Income from Profession?
Who all covers under specified Professionals as per sec 44AA?
Presumptive Taxation
Claiming expenses under 44ADA
Maintaining Books of accounts for freelancers u/s 44ADA?
Books of accounts required to be maintained
Audit u/s 44AB?
What are non-specified professions?
Claiming of expenses and Audit Requirements
Self Employed Businesses
Presumptive Income
Maintenance of Books of Accounts
Audit Requirement
How to save and where to invest?
What is included in my income as a freelancer?
![[UNCUT] เพื่อไทยดันอุ๊งอิ๊งนั่งนายกฯ หลังเศรษฐาถูกถอดถอน | คนดังนั่งเคลียร์ | 15 ส.ค. 67](http://i.ytimg.com/vi/SpprmDJ6QEE/mqdefault.jpg)
best video i have seen till now on this topic. it literally clears all the doubts at once. great work. thank you for sharing.
Thanks 👍
thanks bro, you have cleared a lot of my doubts
Thanks you bahut simply explain Kiya!!
Thank you so much vishal 👍🏻
Sir, Please use mic too. and thank You for the information.
Very nice video. In this type of video you can help out lots of online freelancers like to overcome our taxation burden. Thank you so much sir.
Thanks for the feedback, please share to your friends.
Thank you for sharing much needed information ✨
Please share it to your friends also who r doing freelancing.
@@ProKhata sure
Thanks for making this video.
I have a question.
Is LUT route mandatory if someone is working on foreign clients and earn more that 20 lakh income annually for GST?
Yes if lut route is not opted than 18% gst need to be paid.
@@ProKhata Thanks for you answer. Appreciate it!
Hello Sir
My receipts from upwork is more than 20 lakhs and upwork is deducting GST
I'm not registered under GST. Do I need to register or not ?
Hello,
Yes you need to register for gst
Upwork collects gst on their service charge not on your income.
Bro I am working in Fiverr. Should I pay tax on the amount received in the bank or I should pay tax on the total amount including fiverr's commission?
In form 16A it's showing my income as full amount (including Fiverr's commision)
Please guide.
@@shaileshputhran8334 yes Fiverr commission will be treated as an expense, your total income will be calculated on Fiverr invoice amounts including all expense.
bit confused here? If I am paying GST on Fivrr or upwork then should it not lead to a deduction in the Income tax value? if not would this not be a double taxation issue?
No, gst is collected from service receiver and paid to government by service provider.
While income tax is paid by service provider income only.
What about FIRC certificate? Is it required if the remittances I receive in a financial year is less than 20lac? Or only needed when remittances i receive is more than 20lac?
Also just to confirm, if I receive my freelancing income only from foreign clients and the income earned is less than 20 lac then I don't need to register for GST and no need to apply for LUT. Awaitng your reply. Thanks
Yes correct, Nothing required if you are unregistered.
Hello sir, if a indian wise account holder earning in us dollar and not converting in indian rupees just keeping in the multicurrency account, then any tax rules applies for him?? or have to file ITR?
Yes if you are an Indian resident then all your foreign income is taxable in India.
Hi I hope you're doing good, I have been working on upwork for a year, and did some project but never got charged for GST, but all of sudden this year I noticed buying connects, memeberships and for every payment I am getting charged extra GST as 18%, while my annual income from upwork hasn't even touched 5 Lac properly... then why ? Thanks in advance
You are going wrong in interpretation,
They are charging gst in their service.
You have to charge gst in your service after 20 lakh
Hello sir, can i ask for some doubt ?
if I do prop trading in us derivatives / foreign assets as an independent contractor under a US based proprietary firm for which I'm would receive compensation maybe upto 50 thousand USD per annum as compensation for services gave ...
1. which way i should show my income to pay taxes without facing any trouble of FEMA , US margin trading ( p.s. I guess I'm not doing anything illegal here, I'm not sending money outside of India for margin trading or opening a trading account under a foreign broker + I'm just trading in demo environment / with paper money or virtual money. so no FEMA violation occurred i believe )
2. Can I show this foreign income under 44ADA as freelance income ? if yes ... under which notable / eligible profession ?? because there's no suitable option to select in notable professions list.
3. Can I just select a random one from the list ? like.... " business consultancy " , "Authorized representative" and pay the taxes & not get affected by any kind of legal trouble in future ?
please do reply...
Thank you.
Hello,
Don't worry there is nothing illegal about that, just take the gst registration and file letter of undertaking to avoid 18%gst on that amount and in income tax you can pay tax on 50% under section 44ADA for providing technical services.
Hi does SOFTEX also applies?? if an working as a freelancer and TO < 10 lac through ecommerce operators like UpWork for foreign clients - IT/ITes
If you use purpose code p0802 then no softex form required.
@@ProKhata Thanks for your reply, its kind of confusing;
1- UpWork through Induslnd bank (for local transfer) provide FIRA NOC - with default purpose code - P1006 - not sure if I go ahead with itself - would it be an issue {also if chose nature of business as other software consultancy} in 44ADA.
2- Also read some resources and according to which p0802 should be only used for services provided in India where money is remitted from outside; while p0807 is for exports ; [Not sure - not a CA]
Hi,
Does a person based out of India, earning income from the US as a freelancer and who has filled out the W-8BEN form, have to pay taxes in India as well?
Yes if you stay in India for more than 180 days
If an Indian freelancer earns in USD from platforms like Upwork and Fiverr, then do they need to fill Sch. FSI and FA in ITR also?
No, these incomes from upwork and Fiverr are called exports of service.
@@ProKhatado freelancer who is not raising any bills need to take GST if total turnover exceeds 20 laks
Yes
LIKED YOUR VIDEOS AND SUBSCRIBED, have a small question:
What if we work as an Independent Contractor for an 'outside India company' (export of services) and receive payments in our Indian bank account (Using SWIFT or local bank transfer):
1. Do we need to take /pay GST registration at all? (assume received payments less than 20L but may increase in future)
2. Can we file this income under Section 44 AD?, IF not then under 44 ADA? (Have No other income other than this)
Yes gst compulsory after 20lakh
Yes you can show income under 44ada
@ohnfzo708 Are you doing prop trading of forex /futures ? if yes ... do you know ? how will anyone show their income under 44ADA because there are no matching "eligible / notable profession" in the list of 44ada... in which a prop trader can show his income !
Dear Sir I am a freelancer working for a USA client (software developer and SEO expert) (practicing for the past 12 years) My all transactions are via bank transfer. I wish to fill tax under 44ADA (presumptive income scheme) ITR 4. I get more than 1.5 lakhs per year from Bank FD interest for which the banks deduct TDS @ 10%. I get Saving bank interest about Rs 10,000/-. If my declared gross receipts are 35 lakhs / year at 50% my taxable professional income will be 17.5 lakhs. I do invest in PPF 1,50,000/ and LIC 40,000/- How do I calculate my tax under 44ADA?
Do I need to register for GST as well?
Thanks in advance
Yes you need to register for gst as your service income is more than 20 Lakh,
If you don't have a FIRC certificate then it will not be treated as an export.
For exact tax calculations please book a consultancy call from prokhata.com/product/consultation-call-with-chartered-accountant/
Sir
I received clients payment in crypto. How to calculate that in turnover. As i sell crypto only when need money in bank.
As these cypto payments received from foreign clients but when selling it involves receiving from indian people.
Please reply. Thanks
Treat your crypto wallet as another bank account only, so any crypto received will be counted as service income.
Convert the crypto receipt into INR rate on the receipt date.
Sir i just started freelancing on fiverr. Do I need to register Gst. Because i have seen somewhere (" it is said you will be required to register under GST, even if your business’ annual revenue is less than Rs 20 lakh, which is the threshold for businesses which are required to be registered under GST. Under Section 19 r/w Schedule-III of the Model GST Laws, every form of online business needs to be registered under GST, irrespective of the amount of revenues generated.")
Pls sir guide and i am confused.
No such thing in your case, for Fiverr you can enjoy the 20 Lakh threshold.
@@ProKhata Thank you so much Sir for replying. I have two other questions plz help
1. if I work with direct clients do i need to register for GST?
2. Sir I was seeing OIDAR services needed to register. I am providing social media marketing ( Mostly management) services. Is it under OIDAR Services? If yes what should I do Sir ?
Do you have a SAAS platform ?
I think you have a lot of misconceptions in GST, you can book a consultancy call from prokhata.com/product/consultation-call-with-chartered-accountant
@@ProKhata No, i don't have any Saas platform. Thank you for your prompt response, sir. I'll be sure to consult you later. Right now I have just started that's I got some bit scared of this as I don't have any proper knowledge about tax & GST. But I appreciate your support.
Hi Sir,
Can I book a Tax Consultation Call with you and if I book a Call in the Link you have given of ProKhata will it be YOU or someone else who will take care of my Tax related Queries?
Yes you can book from the prokhata link, I will be connecting personally to handle your case.
@@ProKhata Sir I am a 17-years-old who started freelancing, I opened a current account under my sister's name as no bank allows a person below 18 years to open a current account, is it OK if I pay my taxes under my sister's name as she is not earning any income or will I run into some complications and is there a better way you would recommend me to figure out my situation?
No, you have to file your own return even if you are minor.
@@ProKhata So how can I open a Current Account and from which bank, because I am 17 years old?
You can Open minor saving account. With your parents as guardian and receive all your freelancing income there
Hi Sir, this was an informative video. I have one question. Lets say if I am working in a 9-5 regular job and also freelancing over the weekends, will the service turnover including regular job income + freelancing income?
Hello, no salary income is charged separatelybso it will not be part of service turnover
75 lakh ho gyi hai limit ab 44ada ki 🎉
Yes, under section 44ADA
Hello Rajat, Nice video with detailed information. Thanks for sharing the information and educating the freelancers. However, I am providing a service to a US-based organization and getting paid more than 20L/annum. Also, I already registered GST so do I want to pay the GST amount? Let me clarify here, I am a regular taxpayer with filing ITR with the help of my CA. Kindly suggest and thanks in advance.
If you receive FIRC certificate then no gst payment required, as it will be treated as service export.
@prashantkatkar are you doing any kind of prop trading of forex / future assets ?
Hello, thanks for the video, very clear and informative.
I'm making blow 20 lacs a year from Fiverr as a freelancer working remotely from India and also selling digital products on etsy and amazon for international buyers. I've got GSTin. Can I file nil return for gstr1 and gstr3B. Do I need to get FIRC to prove that my income is foreign income. I have paid income tax. Thank you
yes you require firc for foreign income otherwise 18% gst will be charged, and you cannot file nil gst return, you have to declare as export services in gst returns. you can take our gst return filing services for that. Note : 20 lakh limit is for registration not for taxation, if you are already registered than 20 lakh limit is of no use.
That means if I make 50lakh profit a year, 15 lakhs will need to be given as tax????? Kindly answer.
Yes. GST will also be applicable.
one more question. You mentioned you cannot change the scheme for example I have selected "New Scheme/New Regime" so can I change it in the next financial year or not?
As I heard we can change it so just want clarify
Only salaried person can change rest all cannot.
@@ProKhata Thanks for your answer.
Addition to that one more question. If someone doing freelancing with foreign clients and full time job in India as well then what would be correct Regime "Old / New Regime" and how one can file the ITR?
Hi Sir,
Thank you for making this informative video, one question on salary and freelancng income tax computation?
Hello,
Yes what's your query?
@@ProKhata I was trying to ask about Salary income and Freelance income tax filing together?
@@qbotutor2548 yes you can do that.
@@ProKhata Thank you very much for reply.
Rajat Ji, yearly turnover 20 lac se kam hii(Upwork Income) aur GST b register hi to 18% gst pay krna padega? kyunki turnover to kam hi?
20 lakh k limit registration karwana hai ki nai uske liye hai, ek baar agar registration ho Gaya toh 20lakh ki limit kaam nai aati, 20 lakh se kam ki income mai bhi 18% lagega agar Indian clients hai.
@@ProKhata Hi, you seems to have calculated service turnover using bank statement, but let say in case of UpWork - your service receipt might be 1L and as upwork cut TDS on it - it will count as 1L in your ITR 26as, but as upwork cut 20% commission on but bank account will hit only 80k, in your case you have counted this 80k in your turnover and not 1L, isn't this incorrect?? I am not a CA, would like to know you point on this.
@@shubhambindal7333 yes in upwork, service invoices are considered for gst return. So that it matches with 26AS.
this bank statement method is basically for direct transfer from clients.
@@ProKhata Thanks for your reply :)
Would appreciate if you can help by answering below points as well:
1- As if turnover at the moment is less than 20L, so it is fine to use local bank transfer - as with it getting FIRC is not possible
2- In platforms like Upwork apart from service fee on which they have now started deducting gst ownself, they also charge minor withdrawal fee of $1 for local transfer and exchange rate is as per them - does this attract GST or RCM on the exhange rate difference as compared to the one provided by RBI, if yes does this make liable to register even if threshold
@@shubhambindal7333 there are lot of things we have to consider so I will make a separate video in this topic or you can book a consultancy call.
bhai do foreign client need to charge tds from me ?? plz answer
No, they are not registered in India so they can't pay taxes to Indian government. That's why they cannot deduct TDS.
Hello sir,
Turnover m fiverr jo 20% fee leta h vo b include hota h kya..? Bcz income tax website m 20% includes hoke turnover batata rha h.
Itr fill krna padega kya??
Yes in fiver/upwork you have to consider hourly invoice generated in website as your service turnover, commission of those platforms are considered as expenses.
Yes
@@ProKhata ok sir, thank you:)
Fiverr ki earning ko GST me File kar skte he kya?, agar han to monthly Fiverr ke naam ka GST bill banaye ya individual client ke naam ka?
Yes, fiverr earning should be reported in gst on client bill wise.
@@ProKhata Thankyou
it is ok If i generate bill name of fiverr month end, becouse fiverr transferring us money?
Fiverr is a service aggregator like Amazon,
So fiverr is not availing your services.
You can only bill to your customers who is availing your services
@@ProKhata Thankyou so much sir
Matlab sir mera fiverr, upwork se income ager 2.5 lakh se kam hoga to koi bhi tax pay karne ki zarurat nhi hoga??
Plz sir reply.. I am waiting for your reply.. 🙏🙏
It depends on your other incomes also
@@ProKhata Sir I only work on fiverr. I have no other earning source. My income in fiverr is less than 2.5 lakh. So what do I have to pay tax?
@@ProKhata sir I am waiting for your reply 🙏
Yes no tax
@@ProKhata Thank you so much sir 🙏🙏