Important Rights & Regulations For Freelancers In India

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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 the 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 Now, these taxes have been replaced by GST.

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