Freelancers - ITR filing is must for you

Hi Freelancers!

Income tax reporting has begun, and freelancer earnings are taxable as business income and gains under Section 28 of the Income Tax Act of 1961.

You need to file your ITR when your total receipts during the year has exceeded Rs. 2.5 Lakhs per annum.

However, you must file ITR if your income is less than Rs. 2.5 Lakhs also to get the Income Tax refund.

TDS at the rate of 10% is deducted from total receipts if it exceeds Rs. 20,000 per annum. Suppose your total earnings for the year is about 1 Lakhs, Rs. 10,000 would have been deducted as TDS before making payment to you. 

However, you can get this TDS refund as your total Income is less than Rs. 5 Lakhs per annum.

Moreover, under section 44ADA of the income tax act, 1961, at least 50% of your total receipts shall be declared as total income. Hence even if your total earnings are about 10 Lakhs per annum, you are not required to pay any taxes to the government as your total income will be less than Rs. 5 Lakhs(50% of Rs. 10 Lakhs).

However, filing of income tax return is mandatory to declare the income so received and to Get the Income Tax refund.

So cheer up folks. File your ITR and be Happy.