{"id":1154,"date":"2017-08-14T14:31:28","date_gmt":"2017-08-14T09:01:28","guid":{"rendered":"http:\/\/www.gsthelplineindia.com\/blog\/?p=1154"},"modified":"2019-10-31T13:22:01","modified_gmt":"2019-10-31T13:22:01","slug":"taxes-for-freelancers","status":"publish","type":"post","link":"https:\/\/www.gsthelplineindia.com\/blog\/2017\/08\/14\/taxes-for-freelancers\/","title":{"rendered":"Income Taxes for Freelancers – A Guide To Calculate Tax Amount with Example"},"content":{"rendered":"

Mobile app developers<\/a> (both freelance and full-time) are also liable to pay taxes on their total income from the following sources. For this article, we will take the example of Ankush, who is a freelance app developer to understand the income tax for freelancers.<\/p>\n

Calculating Taxable Income<\/h2>\n

Income from Salaries:<\/strong> Developers who are also working full-time for an employer, are required to mention their annual salary and other similar earnings for the purpose of the tax. Let’s assume that Ankush’s last month salary Rs. 50,000 was deposited into his account before he left his full-time job.<\/p>\n

Income from Freelancing and\/or Business:<\/strong> If you are doing freelance work or running a home-based business, your earnings from that source will be taxable. In this case, Ankush’s annual earning from freelance work is Rs. 4,50,000.<\/p>\n

He is allowed to deduct any expenses that may have occurred during the freelance job. This may include property rent, equipment and furniture cost, resources cost, and\/or any other cost directly related to app development.<\/p>\n

Income from Property:<\/strong> If you own a property from which you are earning in form of rent, the earning will be taxable except the property tax already paid, if any.<\/p>\n

Income from Capital Gains:<\/strong> Any income earned from selling capital assets.<\/p>\n

Income from Other Sources:<\/strong> Income from savings accounts’ interest, fixed deposit interest, or any other income source which cannot be taxed under any of the above heads.<\/p>\n

So, the overall taxable income of Ankush can be calculated as:<\/p>\n

Income from salary:<\/strong> 50,000<\/p>\n

Income from freelance work\/ business – expenses:<\/strong> 4,50,000 – 1,00,000 (let’s assume) = 3,50,000<\/p>\n

Income from property – property tax paid:<\/strong> 2,00,000 – 30,000 = 1,70,000<\/p>\n

Income from other sources:<\/strong> 12,000 (bank interest, etc)<\/p>\n

Total taxable income of Ankush:<\/strong> 5,82,000<\/p>\n

Deductions<\/h2>\n

The following investments are eligible for GST deduction under section 80C:<\/strong><\/p>\n