Guide To Filing ITR For Freelancers In India
The Presumptive Taxation Scheme: A Lesser-Known Blessing
How about a tax scheme that lets you declare just half of your earnings for tax purposes legally? Introducing the presumptive taxation scheme, a game-changer many are unaware of. It’s designed for professionals with gross receipts of up to ₹50 lakh, levied at a flat 8% of turnover. But here’s the kicker—it can effectively cut your tax bill in half.
It’s especially beneficial for newer freelancers or those with modest earnings fluctuating annually. Opting for this scheme reduces not just taxes but also significantly simplifies compliance with fewer bookkeeping demands. Most don’t leverage this, thinking it’s irrelevant to their situation, but they’re leaving free money on the table!
However, choosing this route means a commitment to the same for the next five years. If in any year taxes are filed conventionally, backtracking isn’t an option until the completion of this period. It’s a requirement set by the taxman that’s not widely known but vital to be aware of.
This scheme is a relief that preserves your focus on work rather than endless paperwork and audits. The contrast between those who know of it and those who don’t is typically substantial tax savings, illustrating dramatic earning retention. What you’ll discover next is the kind of loophole even accountants wish they knew sooner…