New Bloggers who Blog to earn some quick money online may not have any knowledge on Income Tax you need to pay for your Freelancing Income. Income tax is mandatory on any type of income based on taxing rules of your country.
In India, any income above Rs.2 lakh is taxable for general tax payers. Lets see if you are eligible to pay income tax for your Blogging or freelancing Income and what is the criteria.
India is a country of Freelancers. most of professional works as Freelancer and earn income on outsourced work. As per the tax view there is no difference between Bloggers and freelancers.
Freelancer’s earning more than Rs.2 lakh per month must be thinking are there any ways to save taxes on your freelancing income? Yes Of course., There are numerous of ways to save taxes and this post will show the same. I will advise you to take help of you Tax consultant to deal with specific scenario.
My Income Tax Experience with Blogging
For Indian bloggers PAN CARD is very necessary to withdraw your Blogging or Freelancing Income. As per the RBI (Reserve bank of India) guidelines, Paypal (Online Payment transfer company) have asked all Indian user’;s to submit their PAN card number and hence without PAN card none Indian Bloggers or freelancers can withdraw their money from Paypal.
As you all know I am a professional Blogger. O generate my income from Blogging and Affiliate marketing. Since I do not have a company registered for my Online Business, I have been paying taxes at hugest bracket for every buck that i earn.
Although I have invested my money in some tax saving schemes but after a lot research I decided to to Recognize my finance from a little from Income Tax point of view.
Tax guide for Bloggers
Here are some Tax tips for Bloggers and Freelancers based on some little information I have with respect to out Complicated Indian Tax rules.
Strategy 1 : If you are NOT in the payroll of any Government of Private organization and If you are generating significant Income via Freelancing or blogging then it is always better to register a company and report all your online income under that company.
This will help you to save tax showing your personal and official expenses under your Company. Major benefit of Having a Company for your freelancing or blogging business is that you can always save some tax towards general expense such as fuel, telephone bills, etc..
However there will be several responsibilities on you after registering your company, you will need to fill quarterly statements and IT returns in specific formats. You should only choose this strategy if you have a significant income from your Blogging or freelancing business.
Strategy 2: If you are Self Employed and there is only limited income then implement with this strategy. Say if you work on your own and there is limited income like you only generate some couple of lakh per year.
In this case you will need to File ITR-4 for reporting your online income. You will need to pay taxes for anything above the Income Tax exemption limit. Many of Indian Bloggers are only earning some limited income and hence this scenario ill suit you. You just need to file ITR 4 and report your all income in it.
Strategy 3: If you are employed yet you earn from Blogging or Freelancing as well. In this case you will need to file your income returns in ITR-4 format. (Business income reporting). many of professional are employed in a company and they also earn from Freelancing or blogging , this will be ok for you if your freelancing or blogging income is much lower than the actual pay of your regular job.
As compared with strategy 1 and 2 this is not a good route to proceed as you need to pay a lot of taxes and sometime you may come under scanner. You should take advise of Tax consultant before filling IT Return.
These were the highly researched taxing tips for Bloggers and freelancers. Check out which strategy suits you and then Implement on it. for limited earners Strategy 2 will be perfect bu you can’t save much tax via this route.
If you are earning high income from Blogging and thinking to grow your online business to next level then it is always better to register a company for your Business which will help to save a lot on tax.
Read more: Payoneer Back in India – Better the PayPal
Some additional Income Tax tips
- Pay Advance tax so you can save some money on interest and Penalties on tax
- Track each and every income and expense carefully.
- Noting down Tax-deducted-at-source information and report it in your returns
- Saving money to pay Taxes without hassle.
New Bloggers just don’t every think abut taxes on Blogging earnings at initial stage but when you cross Rs.2 lakh per year income It is better to pay taxes ethically as every foreign income generated via Paypal or Adsense is tracked and you can anytime come under scanner if you fail to File your IT return.
That’s all about Blogging and taxing, do let me know if you have some more to add on this taxing arena, If you have any other doubts or questions just leave a message in comments section and I will try me level best to help you. Do Share this post with your friends and stay tuned with BloggingEclipse to get yourself updated towards Blogging tips for Indians.
2 thoughts on “Income Tax guide for Bloggers and Freelancers”
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