I am using upwork more than 1 year. Last year, I had earned Rs 30000 from upwork and I had showed this to my income tax as other income.
Example - This year I am earning around 2 lakhs. So should I show this to my income tax and will pay tax in this earning?
There is a bunch of articles in this but I am very confused. If anyone can help, that would be appreciated.
Any income generated from Upwork is to be shown as Income from Business & Profession in Income Tax return in India
You can deduct all expenses related to this work such as connect, internet cost, mobile cost, depreciation on your laptop etc. balance will be income
Your query " Should I show this as Income " . Yes, you have to show this earning as income from Business or Profession as explained above, if you do not show then it will be considered as "concealling of Income" and you will be charged penalty for this ranging from 100% to 200%.
If you need more clarification do let me know, I am Tax consultant in India
Manjay Kumar Sharma
Hello Manjay Kumar Sharma,
Thanks for your reply. I understand this. I have only one question. I just heard from my uncle, we can save tax using 10(7) income tax. We don't need to pay any tax on the outside income. Can you help me to understand this as well? Also, can you tell us about GST? I have read so many articles in the upwork community, we can save tax using GST no something like that.
Income Tax is chargeable on All income generated wihtin or outside India.
GST: GST is exempt on Export of services. All services provided out of India is exempt from GST.
GST is indirect Tax and Income Tax is Direct Tax.
You can not save Income Tax by using GST.
Manjay Kumar Sharma
Thanks Manjay, this was quite informative and useful to me, I had the similar question.
I have earned around 35000 from upwork, in which 20% upwork fee will be deducted.
Resulting to 28000 in my bank account final amount. Then as per my all incomes this will fall under 20% slab.
So out of 28000 another 20% will be gone as a tax which is 5600.
So now question is how do I so this up work fee, mobile cost, laptop/desktop depreciation etc. Under which section of ITR.
I use clear tax for filling my income tax.
Hitesh **Edited for Community Guidelines**
I am Indian tax payer so writing it accordingly.
I have filed ITR3 as any freelance work is considered as business income.( computer and related service )
Upwork submits your upwork income to Indian govt and can be seen under Form 26AS regularly for current year and income as well.
So simple formula will be like this.
40000/- total income
5000/- Upwork Fee
15000/- Show as business expenses. (computer/laptop depreciation cost 20% every year, power cost, internet cost, any license software(antivirus/office etc.), any hardware cost(camera, keyboard etc), eLearning expenses.
So basically, whatever you can think of that you spent for running your freelance career, can be deducated as bussiness expenses.
You get paid in dollar and which you withdraw in rupees right, so it will not be foreign assets. And will be declared as your business income under ITR3(any freelance work I think considered as business income).
If you have registered company in USA/UK etc and working through it then it is different thing and you are not considered indian tax payer.