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Other taxes that apply to a Freelancer

Other taxes that apply to a Freelancer : Xyz wants to know!

We understood expenses of a Freelancer, and calculated Xyz’s taxable income. We also helped Xyz find out total tax payable by him.

Xyz has now understood Income Tax in detail

However, Xyz is unsure if any other taxes apply to him. Whether TDS, Service Tax & VAT apply to him as a freelancer? Let’s take a look

Service Tax – If the total Revenue from freelancing work is Rs 10lakhs or less, Service Tax rules do not apply. However, once you cross Rs 9lakhs in revenue it is mandatory to apply for service tax registration.

Also Xyz is ‘exporting’ most of his services, see revenue details Find out all about Freelancer Expenses. Service tax is not applicable when services are exported.

Therefore, at this stage service tax is not applicable to Xyz.

VAT- VAT is not applicable in this case since there are no physical goods being sold.

TDS – The Indian Payment Gateway charged Xyz Rs. 24,000 as commission fees in the month of March. Xyz has made a payment of Rs. 24,000 to the Payment Gateway for its services. According to law, Xyz has to deduct TDS on this payment.

This helped Xyz understand the taxes applicable to him in detail. Regarding how to deduct TDS from payments and depositing TDS in a timely manner with the government to avoid penalties.

Other taxes that apply to a Freelancer

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Other taxes that apply to a Freelancer

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Other taxes that apply to a Freelancer

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