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01 Oct 2016

Provider Taxation for Freelancers in India


In India, you will find basically 119 services which are taxable and pointed out in Section 65(105) associated with the finance work, 1994.

I am not planning to explore the 119 service, but i am going to explore one service that will be pointed out in nonexempt service Sr.no 54. that will be nothing but “Online Suggestions & Database Access or Retrieval provider” or you can say Blogging, freelancing, web task, web business etc.

Whether you are a freelancer, Blogger or perhaps you are utilising just about any business in which you tend to be sending or receiving information in digital form online comes under this type of service.

Present accounting codes because of this service tend to be:



Bookkeeping codes are employed by Indian national understand the sort of service also to supply a precise percentage of income tax put on this type of service.

Just how to calculate rate of income tax

It is an appealing concern understand “just how to calculate the rate of tax”. Our government hasn’t launched a single advanced version of service income tax calculator till today so we have actually merged ourselves in the plethora of boring and time-consuming computations.

Simply check the points pointed out below:

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

2. Knowledge cess is relevant on 2per cent associated with the service income tax payable. Simply concentrate on the wordings, i will be saying that it’s appropriate on 2per cent associated with the service income tax payable. This means that after determining income tax in 1. You have to use 2per cent about it. It offers signal no. 00440298.


Let us think about which you have actually provided services of 10,000. income tax payable on service = 1000 knowledge cess = 2per cent of 1000 = 20

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

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

In a spending plan address our Finance minister had announced that brand-new income tax on services after adding swachh bharat cess (clean India cess) may be 14.5per cent +.5per cent (Krishi Cess)

Therefore, if you should be unaware of the definition of export of service after that get ready to pay the service income tax 15 per cent

But, wait an additional. My goal is to explain the Export of service at length which will be beneficial for my all Online brothers!!!

According to Rule 6A (1) associated with the provider Tax Rules, your service may be treated as export of service if it uses points a to f in the following way:

a. If you are the provider associated with the service then you must be situated in taxable area.


If you are writer, freelancer, digital entrepreneur in India then you’re immediately following point no. a

b. Recipient associated with the service found outside India.

This means that the service receiver must be found outside India.

For-instance. Bloggers tend to be making profits through affiliate, AdSense etc. Bing Inc. is immediately liable to pay service income tax. You are free of service income tax.

Freelancers tend to be making through their customers on the web. If for example the clients tend to be situated outside India then there is you don’t need to pay service income tax. But if your customer can be found in India Online then you’re liable to pay service income tax.

Digital Entrepreneurs

Digital entrepreneur is a unique term which surrounding inside brand-new era. If you are doing business on the internet and your customer is dependent outside India and you’re receiving service from your own freelancers based outside India via Online method. This means you are acting as an on-line contractor.

That you don’t also to pay a single penny as a site income tax. As work income tax is a State income tax, you might be free of other taxes in addition.

But if your customer can be found in India as well as your worker are also situated in India as a freelancer.Then you are qualified to receive provider Tax Act.

In the present scenario, Our Respected Prime Minister Shri. Narendra Modi had launched a scheme for India that will be “begin Up- Stand Up”.

Inside scheme, If you have brand-new idea then you’re immediately qualified to receive benefits such as:

1. Effortless Loan Treatment.

2. Effortless Patent Registration Treatment.

3. Effortless Trademark Treatment.

4. Free from Tax – Other Employment Taxation.

5. Effortless exit.

and different other benefits which can’t explain by words.

The service is not a site specified in Section 66D of the work that will be known as unfavorable set of this work.

d. The repayment associated with the service has-been obtained by the provider associated with the service in convertible foreign currency and

e. The provider associated with the service and individual associated with the service are not just establishment of a distinct individual in accordance with product (b) of Explanation 2 of clause (44) of section 65B associated with the Act.


This post is actually for information reasons only and will not represent any legal advice/suggestion etc. I am not in charge of any activity taken by you after looking over this post.