Freelancer Tax Guide 2024: GST, LUT, and Section 44ADA Explained
Master freelancer taxation with this comprehensive guide to save lakhs
TL;DR - Freelancer Tax Essentials 2024-25
- Foreign clients = GST mandatory (even if under Rs.20L) + file LUT for 0% GST
- Section 44ADA = 50% deemed profit, no books, no audit (up to Rs.50L)
- Advance tax = Pay quarterly if liability over Rs.10K (or March 15 with 44ADA)
- Deductions: 80C (Rs.1.5L), 80D (Rs.25K), NPS 80CCD (Rs.50K) still available in old regime
- Use our Freelancer Tax Calculator for exact computation
Do Freelancers Need GST Registration?
Yes, if your annual turnover exceeds ₹20 lakh (₹10 lakh for special category states), GST registration is mandatory. However, if you export services, you must register regardless of turnover.
Important for Export Services
What is LUT and How to File?
Letter of Undertaking (LUT) allows you to export services without paying IGST. Instead of paying 18% GST and claiming refund later, you can export at 0% GST rate.
Login to GST Portal
Go to Services > User Services > Furnish LUT
Fill LUT Form (RFD-11)
Enter your business details and export information
Submit with DSC or EVC
Use Digital Signature Certificate or E-Verification Code
Valid for Entire Financial Year
Once approved, LUT remains valid until March 31
Renew Every April
File fresh LUT for new financial year starting April 1
Section 44ADA: Presumptive Taxation for Professionals
Section 44ADA is a blessing for freelancers with turnover up to ₹50 lakh. Under this scheme:
- ✓Deemed profit is 50% of gross receipts
- ✓No need to maintain detailed books of accounts
- ✓No tax audit required
- ✓Simplified ITR-4 form filing
Tax Deductions for Freelancers
| Deduction | Section | Maximum Amount |
|---|---|---|
| PPF, ELSS, Life Insurance | 80C | ₹1.5 lakh |
| Health Insurance | 80D | ₹25,000 |
| NPS Additional | 80CCD(1B) | ₹50,000 |
| Home Loan Interest | 24(b) | ₹2 lakh |
Advance Tax Payment
If your tax liability exceeds ₹10,000, you must pay advance tax in 4 installments:
Conclusion
Freelancing in India comes with unique tax benefits like Section 44ADA and LUT filing for export services. Proper tax planning can help you save significantly while staying fully compliant.
Related Calculators
Section 44ADA Presumptive Taxation
Calculate presumptive income for professionals with 50% deemed profit and single advance tax payment benefit
Freelancer Income Calculator
Convert foreign income (USD/EUR) to INR and calculate tax implications
GST Export of Services Calculator
Calculate GST liability for export services with zero-rated exports under LUT and ITC refund eligibility
GST Calculator
Calculate GST amount for goods and services with reverse calculation
Business vs Professional (44AD vs 44ADA)
Compare presumptive taxation vs regular method (44AD: 8%, 44ADA: 50%)