Frequently Asked Question
Common Questions about Professional Tax Returns
Q. Am I considered a Freelancer / Consultant / Professional ?
When you earn ‘Income’ from self employment, from any profession or work, which requires you to use a skill, which may be intellectual or manual skill, such income will be taxable under the head ‘ Profits & Gains of Business & Profession’.
Q. Is the professional income I earn considered differently ?
Unless you are earning a professional income, which is part of an employment agreement, any income you earn by pursuing your profession skills shall be considered under the head Profits & Gains of Business & Profession.
Q. Why is TDS on my monthly pay deducted at 10% ?
The Income Tax Act requires that TDS should be deducted @10% for any payments made as fees for professional services.
Q. How does claiming expenses help me ?
Claiming expenses that are directly related to your freelancing work, reduces your total income and tax thereon. Your Total Income less directly relatable expenses is your Income from your freelancing work.
Q. Can I expense the cost of the TruTax Plan ?
Yes, you can deduct this expense from your Business Income.
Q. How do I file my Income Tax Return?
Once you sign up with TruTax and provide us the information we need, we do the return filing for you.
Q. What is the ITR-4 ?
Anyone who is carrying on a business or profession is required to submit income tax return in the ITR-4 form.
Q. What is 194J ?
Section 194J of the Income Tax Act lays out that TDS is to be deducted @10% on any amount paid for professional or technical services.