Tax on Freelancer's Income in India

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  1. dinoortolani

    dinoortolani New Member


    For freelancers and paying advance tax, I read that "Every taxpayer is required to make payment of income tax during the year itself in which the income is earned" -- does this mean the calendar year or assessment year starting April 1st?

    Now I'm an international student from India (NRI) studying in the US. Suppose I come back to India and start full time as a freelancer, I pay my regular tax before July 31st - How do I start advance tax after that? Does everything after April 1st of the same year then count towards the advance tax?

    And what if the tax liability ( during the year is less than 10,000 rupees? No tax payment required then?

    Lastly, I'm a student - not a professional freelancer - but I do some freelance work via writing while I'm also looking to get into domain selling. Am I required to pay advance tax? Or can I pay regular tax and still file the ITR4 form?

    Any help will be appreciated. Thanks!
  2. Karan Batra

    Karan Batra Well-Known Member


    Good to see you here.

    1. Advance Tax is required to be paid during the Financial Year based on the estimated income. However, if the tax payable is less than Rs. 10,000 - no Advance Tax is not mandatorily required to be paid.

    If total tax payable is less than Rs. 10,000 a person can be it at year end and not during the year as Advance Tax.

    2. As you are a student and work part-time, I dont think your tax liability would be so much that you are required to pay Advance Tax. So maybe, in the 1st year - you can check how much tax you are required to pay and then pay it at the year end.

    And from 2nd year onwards - pay the Advance Tax accordingly.

    3. You would in any case be required to file ITR 4 only.
  3. dinoortolani

    dinoortolani New Member

    Thanks for the reply.

    For 15-16, my tax liability right now is Rs. 4,800 or so. If it became Rs. 10,000 or more in say, November 2014, I'd have to pay 60% of it before December 15th right?

    I also had a blog from 2012 which I started with no intention of selling. I sold it last week for a big profit so is that capital gain? And if I started selling domain names on a regular basis, would I classify that income as other sources?
  4. Karan Batra

    Karan Batra Well-Known Member

    1. Yes, if total tax payable during the year is more than Rs. 10,000 - you would be required to comply with all dates for payment of advance tax.

    2. If you start selling Domain names on a regular basis, you would be classified as a person who Trades in Domains and therefore this income would be also be taxable under head Income from Business/Profession.
  5. dinoortolani

    dinoortolani New Member


    Some late follow up questions:

    If I pay 100% of my tax liability on March 15, what about any potential income earned from March 15th to April 1st?

    And if I pay my complete tax liability for 15-16, is it absolutely necessary for me to file an ITR? Or is that only if I want a tax refund?
  6. Karan Batra

    Karan Batra Well-Known Member

    1. You will have to estimate the income for the full year and pay tax accordingly on the estimated income. Any minor differences in tax can be paid later as well.
    2. Yes, filing tax returns is mandatory if you there is any income tax paid/to be paid.
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