02 Oct 2016

Provider Taxation for Freelancers in India


In Asia, There are fundamentally 119 services that are taxable and pointed out in Section 65(105) associated with finance act, 1994.

I am not probably explore the 119 solution, but i shall explore one solution which will be pointed out in Taxable solution 54. which will be simply “on line Ideas & Database Access or Retrieval provider” or you can state Blogging, freelancing, web job, web business an such like.

Whether you’re a freelancer, Blogger or you are employing any kind of company in which you are sending or getting information in electronic type on line comes under this type of solution.

Existing bookkeeping codes for this solution are:



Accounting codes are utilized by Indian national to learn the sort of solution and also to provide an exact portion of income tax put on this type of solution.

Simple tips to determine price of income tax

It’s an appealing question to learn “how-to determine the price of tax”. Our federal government has not yet established an individual advanced form of solution income tax calculator till today and we have actually combined ourselves inside multitude of dull and time-consuming computations.

Just check out the things pointed out below:

1. Provider income tax is relevant on 10per cent associated with value of services and it has signal 00440153.

2. Knowledge cess is relevant on 2per cent associated with solution income tax payable. Just concentrate on the wordings, I am stating that its appropriate on 2per cent associated with solution income tax payable. This means that after calculating income tax in step one. You have to use 2per cent about it. It offers signal no. 00440298.


Let us consider which you have actually provided services of 10,000. income tax payable on solution = 1000 Education cess = 2per cent of 1000 = 20

3. Secondary and H. is relevant on 1 per cent of solution income tax payable.

4. Various other penalty/interest – As appropriate and it has signal no. 00440154

In a budget message our Finance minister had established that brand-new income tax on services after adding swachh bharat cess (clean Asia cess) should be 14.5per cent +.5per cent (Krishi Cess)

So, if you should be unacquainted with the word export of solution then be ready to pay the solution income tax 15 per cent

But, wait a second. I will describe the Export of solution in more detail that will be good for my all on line brothers!!!

According to Rule 6A (1) associated with provider taxation procedures, your solution should be treated as export of solution if it employs things a to f inside after way:

a. If you’re the provider associated with solution then you definitely should be located in taxable territory.


If you’re writer, freelancer, electronic entrepreneur in Asia then you are automatically after point no. a

b. Recipient associated with solution found outside Asia.

This means the solution receiver should be found outside Asia.

Including. Bloggers are generating revenue by way of affiliate, AdSense etc. Google Inc. is automatically liable to pay solution income tax. You might be without solution income tax.

Freelancers are making by way of their clients using the internet. Should your consumers are situated outside Asia then there is you don’t need to pay solution income tax. But if your client is situated in Asia on line then you are liable to pay solution income tax.

Digital Entrepreneurs

Digital entrepreneur is a term which surrounding inside brand-new era. If you’re doing business on the internet and your customer is based outside Asia and you are clearly getting solution from your own freelancers based outside Asia via on line medium. This means that you are acting as an internet contractor.

You never also to pay an individual penny as something income tax. As job income tax is a situation income tax, you might be without some other fees also.

But if your client is situated in Asia as well as your worker may also be located in Asia as a freelancer.Then you might be entitled to provider taxation Act.

In today’s scenario, Our Most Respected Prime Minister Shri. Narendra Modi had established a scheme for Asia which will be “Start Up- Stand Up”.

Inside scheme, If you have brand-new concept then you are automatically entitled to advantages including:

1. Easy Loan Procedure.

2. Easy Patent Registration Procedure.

3. Easy Trademark Procedure.

4. Free of Income-tax – Other Employment Taxation.

5. Easy exit.

and various other advantages which can’t describe by terms.

The solution just isn’t something specified in Section 66D with this act which will be referred to as bad a number of this act.

d. The payment associated with solution has been obtained because of the provider associated with solution in convertible foreign currency and

age. The provider associated with solution while the person associated with solution are not just institution of a definite person relative to item (b) of Explanation 2 of term (44) of section 65B associated with Act.


This post is for information purposes just and does not constitute any legal advice/suggestion an such like. I am not in charge of any activity taken by you after reading this post.