How are independent software consultants taxed on their income in India?



If I am an independent software consultant with variable incomes and variable+multiple expenses. How do file my incomes and how would I be taxed?
If I am an independent software consultant with variable incomes and variable+multiple expenses. How do file my incomes and how would I be taxed?

I would specifically like to know, what all categories are there under which I can show my expenses.
I want to evaluate 2 options in order to check which one would leave more money in my hands:

1] if working as a full time employee with ~33%TDS

OR

2] working as independent consultant with 10% TDS … and show the expenses individually.

Please guide.

How are independent software consultants taxed on their income in India?
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2 Replies to “How are independent software consultants taxed on their income in India?”

  1. Firstly you are professional – if your income in financial year crosses Rs.15lac in that case you should maintain all books of account and have a tax audit. If income below Rs.15Lac even in that case you should maintain books of account so that your income can be find out and pay tax but tax audit in not required.


  2. I think, in your case, the second option will be the best suited because you are eligible to claim expenses such as rent, assistant salaries, travelling, books and periodicals, software development related expenses. Then, if you calculate your net profit, then the average tax rate will be around 10% and for that your already deducted TDS will be enough. If you are employed, directly tax will be deducted without allowing any expenses. Moreover, this work needs expert professional knowledge, you are eligible to claim your income under the head of Income from Profession.
    Hope you will get the answer.
    Thanks





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