Good news for freelancers, consultants; they are now under presumptive tax

Finance Minister Arun Jaitley, in his Budget 2016 speech, gave a huge relief to freelancers and consultants. They will now fall under the ambit of presumptive tax, where they will declare profit and pay taxes at a rate of 50% of gross receipts.

The tax will be filed by filling ITR 4S over the lengthy and tedious ITR 4 form. But, TDS of 10% will still be applicable on freelancers under Section 194J of I-T Act.

Till now, professionals, consultants had to maintain books of work-related expenses for eight years even after filing the returns.

The presumptive tax scheme is a great thing for people who do not have much business expenses, for example private tutor, etc.

The popular online tax filing platforms have basic plans for freelancers starting at as low as Rs 3,500 and going up to Rs 10,000 to Rs 12,000 where you need not do anything.