Indian tax laws are weird and for a freelancer like me, I have to make up the rules as I go along since there doesn’t seem to be much precedent. Advance taxes are a particularly painful puzzle. Apparently the government is not happy to receive my taxes all at one go at the end of the year. Instead, I have to pay them 30% in September, 60% in December, and of course 100% in March. All very well, but how the hell do they expect me to know my income in advance? I’m not a fortune teller and my cash flow swings widely from one year to the next. I can land some awesome project by sheer luck or lose out on some valuable contracts and watch my earnings tumble.
To make matters worse, if I underestimate my income I have to pay interest at 1% per month. Which I will obviously have to calculate accurately or risk receiving a notification from the Income tax. What is wrong with these people? I mean didn’t an alarm bell go off in someone’s head when this policy was being formulated? Didn’t anyone stop to think “Hey! What if the nature of the business is such that there’s no way to project the income for the year?”. At least they can make it so that I pay tax on whatever I’ve already earned this far. So if my earnings suddenly spike in October, I will know how much to pay in December. The absurdity of a flat 30% of future income seems to have escaped everyone’s notice.
I’m sure I’m not the only freelancer out there or the only person with a small business who has problems following this crazy concept of “advance tax”. So if any of you know how I’m supposed to pay up without having the slightest clue as to what my final income will be, your advice would be much appreciated.
i totally agree. i have often wondered about this myself. have asked Zeni’s C.A. Jehangir if he could help out with a few ideas
In reply to tp
Just paid Rs. 8,000 advance tax. Let’s see how it goes.
Cry about it, bitch. And go get me my tea Jamal
You know what Bhagwad? You are almost worth going past trolling and taking this into real actual hate or even real world harassment. But you know what? I’m white. I’m white and you’re brown. You could live in a 10 million dollar mansion and I could live underneath a bridge… and at the end of the day you would still be beneath me. Because I am white and you are brown.
One more ignorant sand eating nigger isn’t going to break the service industry.
Everyone else can keep trolling you, but by the power vested in me by my white skin, I am declaring myself right and you wrong.
You might think this requires some sort of explanation or further argumentation, but it doesn’t It is a white man’s right. I am declaring you, brown skin, wrong. End of discussion.
In reply to Wait a Minute I’m White
Lol. Whatever dude.
Around 2.9% of Indians file income tax. 15% of Indians use the internet but only a small percentage make money through the internet and enough money that they actually have to file taxes. (i.e income crosses the exemption limit)
Given this data and the fact that most of the traditional businesses manage to estimate their income after the initial few years and employees don’t have to worry about their taxes, the govt. has hardly looked into the hardships of a freelancer.
Every law is amended with changing circumstances and if concerns are raised regarding these issues, they will be taken into consideration.
But when the law was made, it was with regards to the circumstances at that point in time. So, wasn’t all dumb but not amending it now would be.