₹ Freelancer Tax Reality Calculator
What you actually take home after GST, income tax, and business expenses. The reality check before going freelance in India.
₹
Rs 13.50 L
Annual Take-Home
Rs 1,12,500/month
Effective Tax Rate: 17.5%
Gross Income
Rs 20 L
Expenses
Rs 4 L
GST Payable
Rs 1.8 L
Income Tax
Rs 1.7 L
Take Home
Rs 13.5 L
Effective Rate
17.5%
₹️ GST Analysis
Domestic Income
Rs 14,00,000
Export Income (Zero-rated)
Rs 6,00,000
GST Collected (18%)
Rs 2,52,000
GST Input Credit
Rs 72,000
Net GST Liability
Rs 1,80,000
₹ Income Tax Breakdown
Total Deductions
Rs 4,00,000
Taxable Income
Rs 16,00,000
Base Tax
Rs 1,65,000
Surcharge
Rs 0
Education Cess (4%)
Rs 6,600
Total Income Tax
Rs 1,71,600
₹ Income to Take-Home Waterfall
₹ Where Your Money Goes
⚖️ Freelancer vs Salaried Comparison
₹ Quarterly Tax Payment Schedule
Plan your cash flow around these due dates
₹ Tax Optimization Insights
📖 How to Use the Freelancer Tax Calculator
- Enter Annual Income: Input your total gross freelance income before any deductions or taxes.
- Set GST Status: Toggle whether you're GST registered. Mandatory if turnover exceeds Rs 20 lakh.
- Select Client Mix: Choose Indian, Foreign, or Both. Foreign income is zero-rated for GST, saving you significantly.
- Enter Business Expenses: Include legitimate expenses like software, internet, equipment, co-working space, travel.
- Choose Tax Regime: Select Old (with 80C/80D), New (lower rates), or Presumptive 44ADA (50% automatic deduction).
- Review Results: See your actual take-home, GST liability, income tax, and quarterly payment schedule.
₹ Understanding Freelancer Taxation in India
GST for Freelancers
When is GST Registration Required?
- Mandatory if annual turnover exceeds Rs 20 lakh (Rs 10 lakh for special category states)
- Voluntary registration allowed below threshold to claim input tax credit
- Export of services (foreign clients) is zero-rated - you can claim full ITC refund
GST Rate: Professional services attract 18% GST. You collect from clients and pay to government after deducting input credit on business purchases.
Choosing the Right Tax Regime
New Regime (Default from FY 2024-25):
- Lower tax rates but no deductions except Rs 75,000 standard deduction
- Best for those with low deductions and simple tax filing
- Tax-free up to Rs 7 lakh (after Rs 25,000 rebate)
Old Regime:
- Higher rates but allows 80C, 80D, HRA, and other deductions
- Best if you have significant deductions (PPF, ELSS, home loan, health insurance)
- Tax-free up to Rs 5 lakh
Presumptive Taxation (Section 44ADA):
- Available for professionals with gross receipts up to Rs 75 lakh
- Automatic 50% deduction - only 50% of income is taxable
- No need to maintain detailed books of accounts
- Advance tax due in single installment by March 15
- Can still claim 80C, 80D deductions
Advance Tax Requirements
If your total tax liability exceeds Rs 10,000, you must pay advance tax:
- June 15: 15% of total tax
- September 15: 45% cumulative
- December 15: 75% cumulative
- March 15: 100% cumulative
Under presumptive taxation (44ADA), you can pay entire advance tax by March 15.
Freelancer vs Salaried: Key Differences
| Aspect | Freelancer | Salaried |
|---|---|---|
| GST | 18% on domestic income (if registered) | N/A |
| Business Expenses | Fully deductible | Limited to Rs 75K standard deduction |
| Employer Benefits | None - must self-fund PF, insurance | PF, gratuity, health insurance |
| Tax Filing | ITR-3 or ITR-4, quarterly GST | ITR-1 or ITR-2 |
| Cash Flow | Variable, must plan for tax outflows | Steady, TDS deducted at source |
❓ Frequently Asked Questions
Do freelancers need to register for GST in India?
GST registration is mandatory if your annual turnover exceeds Rs 20 lakh (Rs 10 lakh for special category states). Below this threshold, registration is voluntary but can be beneficial to claim input tax credit on business expenses. If you have foreign clients, being registered allows you to claim ITC refunds on zero-rated exports.
What is Section 44ADA presumptive taxation?
Section 44ADA allows professionals (doctors, lawyers, engineers, architects, accountants, consultants, etc.) with gross receipts up to Rs 75 lakh to declare 50% of receipts as taxable income. This means you automatically get a 50% deduction for expenses without maintaining detailed books. You can still claim Chapter VI-A deductions (80C, 80D) on top of this. It simplifies compliance significantly.
Is freelancing more tax-efficient than salaried employment?
It depends on your situation. Freelancers can deduct all legitimate business expenses, use presumptive taxation, and have more flexibility in timing income. However, they must pay GST, don't get employer contributions to PF, and lack job security. At higher income levels (Rs 15L+) with proper planning, freelancing can be more tax-efficient. Below Rs 10L, the difference is minimal.
How do I pay GST as a freelancer?
If registered under regular scheme, file GSTR-3B monthly (by 20th of next month) and pay GST. Under QRMP scheme (turnover up to Rs 5 crore), file and pay quarterly. You collect 18% GST from Indian clients, claim input credit on business purchases, and pay the difference to government. Export services are zero-rated - no GST but you can claim ITC refund.
What business expenses can freelancers claim?
Common deductible expenses include: internet and phone bills (business portion), software subscriptions, computer and equipment (depreciation), co-working space or home office rent, professional development and courses, travel for client work, accounting and legal fees, marketing expenses, and professional insurance. Keep invoices and receipts for all claims.
When should I pay advance tax?
If your total tax liability exceeds Rs 10,000 after TDS, pay advance tax in installments: 15% by June 15, 45% by September 15, 75% by December 15, and 100% by March 15. Under presumptive taxation (44ADA), you can pay the entire amount by March 15. Missing deadlines attracts interest under Sections 234B and 234C.
How do foreign client payments work for GST?
Services provided to clients outside India are treated as "export of services" and are zero-rated for GST. This means you charge 0% GST to foreign clients but can still claim input tax credit on your business expenses. You can get this ITC as a refund. To qualify, payment must be received in foreign currency and service must be delivered outside India.