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Question to Indian Freelancers

Discussion in 'Payment Processing' started by asvd22, Feb 28, 2013.

  1. #1
    I hope that I am posting my question in the right section of the forum

    I am doing full time freelance and I would like to file income tax for my income. Though I don't owe much taxes, I want to file tax so that I can be worry free and for applying loans. But I don't have any idea about how to file a income tax. My question is

    1) What is difference between income tax and income tax return? Being first time, on what time of the year I need to file my income?
    2) I learned that we need to use ITR form 4 for freelancers like me. But I have no idea about how to fill it. My question to full time Indian freelancers here, do you file tax all by yourself or one need to go for a CA? If chartered accountant is necessary, will they charge too much? I would like to fill it myself. Is it possible?

    What are the things we need to keep in mind while filling? Please help guys as I am totally confused.
    asvd22, Feb 28, 2013 IP
  2. iwebsocial

    iwebsocial Active Member

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    #2
    TDS is Tax Deducted at Source. It is a part of income tax. If your income exceeds the taxable income limit, your employer will deduct tax every month provisionally or at the end of financial year from your salary itself. At the end of financial year when you file IT return, you have to calculate the final Income tax payable by you for the whole year. If it exceeds the TDS, you have to pay byn Challan in Bank. If the IT falls short of that collected by your employer you can claim refund from the IT department.

    With more and more growth of internet in India, the number of freelancers or independent contractors is on a steep rise. People prefer to work for themselves on their own terms than an employer and are capable of earning far more than what they would in their day to day job. So the question comes “Do I need to pay taxes for my earnings as a freelancer”? The answer is YES and you need to pay taxes and file your income tax returns even if you are an individual consultant or a freelancer.
    Within Indian Law any individual running a business where he/she is the sole owner is termed as a Sole Proprietor, the same applies with a Freelancer. A person earning on his own is considered a Sole Proprietor and needs to file income tax returns using the ITR-4 return form . If you have any other income source (maybe your full time job) you need to include that as well while filing your income tax return.

    For the financial year 2012-13 (Assessment year 2013-14) , the income tax slabs have been defined by the government of India as follows. The numbers are revised every year at the time when the finance minister announces the budget so do keep an eye for next year.

    [​IMG]



















    The tax slabs are self explanatory, if you are a general tax payer or female tax payer for the first 2 lakh of your income for the year you don’t need to pay any tax after which 10% slab is applicable till 5 lakhs and beyond that 20% and 30%.
    Last edited: Mar 2, 2013
    iwebsocial, Mar 2, 2013 IP
    kingofking likes this.
  3. ynmrav28

    ynmrav28 Greenhorn

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    #3
    You need IT returns while applying for a loan.We are self-employed so we need to file it that we make that much income in a year.Its just a record
    ynmrav28, Mar 4, 2013 IP
    ritesh8385 likes this.
  4. ritesh8385

    ritesh8385 Active Member

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    #4
    IT return is a must,you need to file the return.SPecially as pointed out by ynmrav28,it will be helpful while applying for a loan.
    ritesh8385, Mar 11, 2013 IP
  5. asvd22

    asvd22 Greenhorn

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    #5
    Hi iwebsocial, I read that article before but thanks for posting it here. My problem is that ITR-4 form has lot of column and so much to fill, mostly relevant for companies who maintains balance sheet, profit and loss statement. But as a freelancer I don't know which are the things I need to fill. Also can we deduct business expenses like internet charges, computer depreciation etc. ? Do you or anybody know about this?
    asvd22, Mar 14, 2013 IP
  6. asvd22

    asvd22 Greenhorn

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    #6
    So, do yo know how to fill ITR-4 form by yourself? Or do have CA doing for you? I am completely baffled now. Please help.
    asvd22, Mar 14, 2013 IP
  7. Pitu

    Pitu Active Member

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    #7
    You could hire a lawyer to file the it return .
    Pitu, Mar 14, 2013 IP
  8. asvd22

    asvd22 Greenhorn

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    #8
    Hire a lawyer for filing income tax? But not a charted accountant?
    asvd22, Mar 23, 2013 IP
  9. Pitu

    Pitu Active Member

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    #9
    income tax lawyer .
    Pitu, Mar 23, 2013 IP
  10. Deepa7476

    Deepa7476 Active Member

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    #10
    Finally, someone is discussing Income Tax and Freealance earnings in the same thread.
    wish I had bumped here earlier.

    Not sure if this would help,
    I have a short compilation on :Income Tax for Freelancers, make an informed start.
    (esp since @asvdd asked about deduciting business related expenditure)
    It seems I am not allowed to upload file.
    Please run a google search on this title, and you can read it online (or downlaod if need be)

    Hope this helps
    Deepa Govind
    Deepa7476, Apr 18, 2013 IP
  11. Dilip Kumar

    Dilip Kumar Peon

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    #11
    Hey friends,

    I am CA Final Student with 4 years experience in a reputed CA Firm and 3 years in blogging field. If you are looking for filing your returns, you can hire me. Send me a PM for more information.

    Thanx
    Dilip Kumar, Jun 15, 2013 IP