Updated on: Jan 13th, 2022
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5 min read
Freelancers who earn a freelancing income or professional income, which could be income from google adsense, or from projects over Upwork, or are providing any other form of professional work, are rendering ‘Services’, let us see whether they have to pay Service Tax.
When you earn an Income from a ‘Service’ – Service Tax is usually required to be paid by You – the provider of service and you have to recover this tax from the receiver of such services. Add it to the total value of your service and the client has to make the payment inclusive of this tax. Current service tax rate is 12.36%. Let’s say your total billing to your client is Rs 75,000. Service tax on it shall be Rs 9270. You invoice your client Rs 84270 and Rs 9270 will be service tax collected from the client and which has to be deposited to the government.
Service tax payments can be done online. Doing these payments online is mandatory if your payments exceed Rs 1lakh in a year. Service tax has to be deposited with the government either quarterly or monthly based on whether you are an individual/company/partnership. Interest may also become payable for any delays in depositing service tax with the government.
Service Tax Returns have to be filed twice a year in Form ST-3 or ST-3A as applicable. Once you obtain a Service Tax Registration number, return filing is compulsory for you.
Do reach out to us cleartax.in if you have any questions related to service tax applicability to your income or need to get yourself registered, we will be happy to assist you!
Freelancers earning through services must pay service tax, recover it from clients. 12.36% is the current rate. Service tax not applicable if revenue is under Rs 10 lakhs. Registration mandatory if revenue exceeds Rs 9 lakhs. Not applicable for services exported out of India. Payments online for sums over Rs 1 lakh annually. Returns filed twice a year.