From a taxation perspective, freelancers fall under small businesses. And paying taxes is considered a civic duty.
Invoices form an integral part of any business transaction. The right kind of invoice is to be attached while uploading returns to get tax benefits.
Here are the various tax exemptions and incentives available under Startup India.
The government of India has introduced various tax incentives for startups to flourish in India, which includes tax rebate for a 3-year period.
GST has replaced most other indirect taxes like service tax, VAT, central excise duty, additional customs duty, surcharges and octroi.
The scheme is Ideal for businesses with a turnover of less than Rs 1.5 crore. Small taxpayers can bid tedious GST formalities adieu and only pay GST at a fixed turnover rate.
HSN stands for Harmonized System of Nomenclature, and is used to classify goods in a systematic manner.
Angel tax is charged at the maximum marginal rate of 30%. This affects the investor as well as the receiver as they are losing almost one-third of the investment in taxes.
GST offers numerous benefits to startups like simple tax processes, online procedures and ease of doing business.
Understanding reverse charge mechanism can help businesses surmise their transactions in a more comprehensive manner.