π Taxation for Freelancers, Consultants & Professionals πΌ
The Income Tax Department has simplified taxation for small businesses and professionals by introducing specific sections for them. Let's discuss the details of the applicable sections for professionals:
Taxation for Professionals, Freelancers & Consultants (Section 44ADA) π
If you are a freelancer, consultant, or a specified professional with gross receipts up to INR 50 Lakhs, you can offer your income at 50% of total receipts. For example, if an interior designer has total receipts of βΉ35 Lakhs, they can declare βΉ17.5 Lakhs as income in their ITR and pay tax accordingly.
Update from FY 2023-24:
- The limit of gross receipts has been increased from INR 50 Lakhs to INR 75 Lakhs if cash receipts do not exceed 5% of total receipts.
Specified Professionals Include:
- π Legal
- π₯ Medical
- ποΈ Engineering or Architectural
- π Accountancy
- π οΈ Technical Consultancy
- π Interior Decoration
- π Any other profession as notified by CBDT
