Is freelance good career in India

The Indian citizen wants to work as a freelancer for Europe. How do I pay taxes in India?

In India, one can do a freelance job without having to set up a legal entity [company / company, etc.]

You can receive money directly in your individual account. Simply open the account with a leading bank. The funds would be converted directly into Indian rupees at the current rate. Alternatively, you can open a euro account and receive the money there and decide when you want to convert.

In the tax return form there is a section "Income from other sources" with the category "Other". You have to report the income there and pay taxes.

Note that taxes must be paid quarterly in advance, otherwise you will have to pay a penalty of 1% per month and interest of 1% per month.

If the amount will be large [in the range of 5 to 10 lacs per year], please keep a good record of all transactions.

Alternatively, you can hire a good certification body to take care of your taxes and also advise on some of the deductions you can claim [for example, if you buy a computer for your freelance work, you can deduct this from your salary]. Usually the fees for this type of work range from Rs 1000 to Rs 5000 / -.

Edit: Typically, the company might give you a work order that states the volume and amount of work. For payment, they can ask you for an invoice. The invoice is just a statement of your work. As a minimum, it should include a description of the work done, the amount due [in the agreed currency], the due date, the payment on account, the reference of the work order sent to the company, etc. The company may insist on a declaration that all taxes in India are your responsibility. This can be done and transmitted in a Word document. Alternatively, you can ask the company to send you a sample invoice.

It is very important that you have all work orders, invoice, and payment receipt date on hand [keep for at least 3-5 years] so that you don't have to walk around asking the tax department. If the amount you get is in the range of 5 to 10 rupees per year, the tax department usually doesn't bother you. If the amount increases, there is a chance your returns will be reviewed. Therefore, it is advisable to keep all records in order.

Smitha

Many thanks to Dheer for your valuable contributions. What if the company asks me for an invoice?

ktkaushik

Thank you Dheer. I also have a PayPal account. I'm not sure how to use it well. Any tips on how to send these funds straight to my account?

Dheer

The transfer from PayPal to your Sparkasse takes place automatically. If you expect outside funds in your PayPal account, you will need to link it to your bank account. According to RBI, it is mandatory for PayPal [threshold of Rs 5K?] To automatically transfer funds to the bank account.