10 Tax Saving Tips Every Indian Freelancer Must Know

Use Section 44ADA (Presumptive Taxation)

If your annual receipts are under ₹75 lakhs, declare only 50% as taxable income. No need to maintain books or get audited.

Maximize Section 80C (₹1.5 Lakh)

Invest in tax-saving instruments to reduce taxable income by up to ₹1.5 lakhs.

• • ELSS Mutual Funds - Best returns, 3-year lock-in
• • PPF - Safe, 15-year lock-in, tax-free returns
• • NPS - Additional ₹50K under 80CCD(1B)
• • Life Insurance Premium
• • Children's Tuition Fees

Health Insurance - Section 80D

Deduct health insurance premiums from taxable income.

Claim Home Office Expenses

If not using 44ADA, deduct a portion of home expenses as business costs:

• • Rent (proportional to workspace area)
• • Electricity bills
• • Internet charges
• • Furniture & equipment depreciation

Deduct Professional Development

Expenses for improving your skills are deductible:

• • Online courses (Udemy, Coursera)
• • Professional certifications
• • Books & subscriptions
• • Conference & workshop fees
• • Software subscriptions (Adobe, Figma, etc.)

Equipment Depreciation

Claim depreciation on work equipment:

Choose the Right Tax Regime

Compare Old vs New regime based on your deductions:

Pay Advance Tax to Avoid Interest

If tax liability exceeds ₹10,000, pay advance tax to avoid 1% monthly interest under 234B/234C.

Track TDS Deducted by Clients

Clients deduct 10% TDS on payments above ₹30,000. Ensure you:

• • Collect TDS certificates (Form 16A)
• • Verify TDS in Form 26AS
• • Claim credit while filing ITR
• • Request refund if TDS exceeds tax liability

Keep Digital Records

Maintain organized records for at least 6 years:

• • All invoices issued
• • Bank statements
• • Expense receipts
• • Investment proofs
• • TDS certificates