Indian Freelancer Tax Reference
Indian Freelancer Tax & GST Glossary
Short, accurate definitions of every Indian tax and GST term a freelancer encounters — no jargon, no legalese, with a worked example and a practitioner tip for each.
Indian freelancers face a compliance stack that most Western SaaS tools don't even recognise: GST filings, TDS certificates, presumptive taxation under 44ADA, and four different ITR forms. This glossary covers GST, income tax, TDS, ITR forms, identifiers (GSTIN, PAN, FIRC), and the core concepts behind each. Every definition is verified against the CGST Act, Income Tax Act 1961, and Finance Act 2025.
GST
GSTR-1
Monthly or quarterly return of outward supplies (sales) filed by every registered taxpayer.
GSTR-3B
Monthly summary return where you pay GST liability and claim Input Tax Credit.
GSTR-2B
Auto-drafted, static monthly ITC statement showing which inward supplies you can claim.
CGST, SGST, and IGST
Three GST components: Central GST, State GST, and Integrated GST.
SAC (Services Accounting Code)
6-digit code that classifies services for GST reporting (the services equivalent of HSN).
HSN (Harmonized System of Nomenclature)
6-8 digit code that classifies goods for GST reporting (the goods equivalent of SAC).
LUT (Letter of Undertaking)
Undertaking that lets exporters supply zero-rated GST services without paying tax.
RCM (Reverse Charge Mechanism)
GST mechanism where the recipient, not the supplier, pays the tax directly to the government.
Composition Scheme
GST lite registration for small suppliers — fixed low rate, no ITC, Bill of Supply instead of Tax Invoice.
Income Tax
Section 44ADA
Presumptive taxation scheme for specified professionals — 50% of gross receipts is deemed profit.
Section 44AD
Presumptive taxation for small businesses — 8% (or 6% if non-cash) of turnover is deemed profit.
Section 87A Rebate
Income tax rebate that effectively zeros out tax for low-to-mid income earners.
Section 234B Interest
Interest payable when advance tax paid is less than 90% of assessed tax.
Section 234C Interest
Interest on shortfall in any of the four advance tax instalments.
Advance Tax
Income tax paid in quarterly instalments during the financial year itself — before filing the ITR.
TDS
Section 194J
TDS on professional and technical service fees — 10% / 2% with Rs. 50K threshold.
Form 26AS
Consolidated annual tax statement showing all TDS, advance tax, and refunds.
Form 16A
TDS certificate issued by deductors for non-salary TDS (e.g., 194J, 194C).
AIS (Annual Information Statement)
Comprehensive annual statement showing all financial transactions reported to the IT department.
TDS (Tax Deducted at Source)
Mechanism where the payer withholds and deposits income tax on the payee's behalf.
ITR
Identifiers
GSTIN
15-character alphanumeric GST registration number assigned to every GST-registered taxpayer.
PAN (Permanent Account Number)
10-character alphanumeric identifier issued by the Income Tax Department.
FIRC (Foreign Inward Remittance Certificate)
Bank certificate confirming receipt of foreign currency payment.
Concepts
Presumptive Taxation
Tax scheme where profits are presumed at a fixed percentage of receipts, no books required.
ITC (Input Tax Credit)
GST paid on business purchases that you can deduct against your output GST liability.
FY vs AY (Financial Year vs Assessment Year)
FY is the year in which income is earned; AY is the next year, when tax is assessed.