Freelance Income Tax Calculator India FY 2024-25
Calculate your income tax liability as a freelancer in India for Financial Year 2024-25. This calculator compares both the Old Tax Regime and New Tax Regime to help you choose the one that saves more tax. Enter your gross freelance income, business expenses, and deductions to get an instant tax estimate.
How Income Tax is Calculated for Freelancers
As a freelancer in India, you are taxed under the head "Profits and Gains of Business or Profession" (PGBP). Your tax calculation follows these steps:
Step 1: Calculate Gross Income
Add up all payments received from clients during the financial year. This includes payments in INR and foreign currency (converted at the exchange rate on the date of receipt).
Step 2: Deduct Business Expenses
Subtract legitimate business expenses from gross income. Common deductible expenses include:
- Internet and phone bills (business portion)
- Software subscriptions and tools
- Computer and equipment depreciation
- Co-working space or home office rent
- Professional development and courses
- Travel for client meetings
- Accounting and legal fees
Step 3: Apply Standard Deduction
From FY 2024-25, a standard deduction of ₹75,000 is available under the new tax regime. Under the old regime, it's ₹50,000.
Step 4: Claim Chapter VIA Deductions (Old Regime Only)
If you choose the old tax regime, you can claim deductions under:
- Section 80C: Up to ₹1.5 lakhs for PPF, ELSS, LIC, etc.
- Section 80D: Health insurance premiums
- Section 80E: Education loan interest
- Section 80G: Donations to approved funds
Taxable Income = Gross Income - Business Expenses - Standard Deduction - Chapter VIA Deductions
Step 5: Apply Tax Slabs
Tax is calculated based on slabs. The new regime has more slabs with lower rates but no deductions. The old regime has fewer slabs but allows deductions.
New Tax Regime Slabs (FY 2024-25)
| Income Range | Tax Rate |
|---|---|
| Up to ₹3,00,000 | 0% |
| ₹3,00,001 - ₹7,00,000 | 5% |
| ₹7,00,001 - ₹10,00,000 | 10% |
| ₹10,00,001 - ₹12,00,000 | 15% |
| ₹12,00,001 - ₹15,00,000 | 20% |
| Above ₹15,00,000 | 30% |
Old Tax Regime Slabs (FY 2024-25)
| Income Range | Tax Rate |
|---|---|
| Up to ₹2,50,000 | 0% |
| ₹2,50,001 - ₹5,00,000 | 5% |
| ₹5,00,001 - ₹10,00,000 | 20% |
| Above ₹10,00,000 | 30% |
New Regime vs Old Regime: Which to Choose?
The choice between tax regimes depends on your deductions. Here's a quick guide:
- Your total deductions are less than ₹3-4 lakhs
- You don't have significant investments in 80C instruments
- You prefer simplicity over tax planning
- Your income is below ₹7 lakhs (full rebate available)
- You have high deductions (HRA, 80C, 80D, etc.)
- You have a home loan with interest deduction
- You're maximizing PPF, ELSS, and insurance premiums
- Your total deductions exceed ₹4-5 lakhs
Assumptions & Limitations
- This calculator uses FY 2024-25 tax rates and slabs
- Surcharge is applied for income above ₹50 lakhs
- Health & Education Cess of 4% is applied on tax + surcharge
- Rebate under 87A is applied for eligible income levels
- The calculator does not account for capital gains or other income heads
- For presumptive taxation under 44ADA, use our dedicated calculator
- Marginal relief on surcharge is applied where applicable
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