Income tax laws have not clearly defined online business and individual online activities for income tax regulation.
This creates a lot of confusion for online business owners and freelancers for filling their income tax returns.
If you have just started your online business or working as a freelancer, the easiest way is to file the return under the Presumptive income section of 44ADA.
Under this section, you would get a 50% deduction on your total gross receipts and the remaining 50% will be considered as your taxable income.
For example, if you have received Rs. 10 Lakhs of money from freelance services then only 50% i.e Rs. 5 Lakh will be your taxable income under section 44ADA.
The biggest advantage is, you don't need to maintain the account books.
Check our recently published article on tax filing for online business/professionals.
You will get complete clarity about the taxation aspects of online businesses from this article.
Thanks,
Pardeep Goyal.
