How to pay Income tax yourself as a Remote Worker/Freelancer
Hey guys.
The Income Tax Department is on an email spree this time. Many taxpayers have received notices from Income tax demanding more taxes.
If you want to pay the Income tax yourself, this article is for you
Let us understand the basics.
If you work remotely from India for a company outside India:
- You are not an employee
- You do not earn salary income
- You provide services
- Your income is professional income
Income tax places this income under "Profits and Gains from Business or Profession."
Section 44ADA covers remote IT professionals
Once your income is classified as professional income, Section 44ADA comes into play.
Section 44ADA applies to IT professionals providing services from India. This section exists to simplify the tax process.
Under this section, income tax fixes your profit by law.
Income tax assumes:
- 50% of what you receive is expense
- 50% of what you receive is income
Tax is calculated only on that 50%. Your real expenses do not matter. Your real profit does not matter. The law fixes the number.
- You do not submit bills.
- You do not explain expenses.
- You do not maintain books.
[Who can use Section 44ADA]{.underline}
Section 44ADA applies as long as limits are not crossed.
You fall under this section when:
- You are an individual
- You provide IT services
- You are resident or RNOR
Receipt limits depend on how money is received.
- ₹75 lakh applies when more than 95% of receipts come through bank transfers
- ₹50 lakh applies when more than 5% of receipts come through crypto, shares, or cash(rare)
If you cross these limits , Section 44ADA will not apply that year.
Understand the meaning of Gross receipts and why they matter
Tax under Section 44ADA starts with gross receipts.
Gross receipts mean everything your client transfers to you in exchange for your work.
This includes:
- Core payments (Monthly/bi-weekly/Hourly/ fixed contract)
- Reimbursements
- Bonuses
- Shares and tokens
Gross receipts do not mean profit. Gross receipts do not mean money left after expenses.
[Expenses do not reduce gross receipts]{.underline}
This is where some people make a mistake.
Under Section 44ADA, expenses do not reduce income.
You cannot subtract:
- Laptop cost
- Internet bills
- Rent
- Electricity
- Platform fees (like Fiverr or Upwork fee)
The law already deducted expenses through the 50% rule.
[Why gross receipts must be accurate]{.underline}
Under Section 44ADA, the tax officer cannot question expenses. The tax officer cannot question the profit percentage.
The tax officer can question only one thing. That thing is gross receipts.
If receipts are understated, tax increases. If receipts are correct, income calculation stays fixed.
What conversion rate to use
Remote workers receive payments in foreign currency.
The rule is simple.
When your client pays through a bank transfer:
- The client pays in foreign currency
- The bank converts it into INR
- INR is credited to your bank account
For income tax, the INR credited is your income.
- No RBI rate applies. No Google rate applies.
There is one exception.
This happens when:
- You completed work during the year
- Payment did not reach you before filing the return
Income tax still requires income reporting.
[Rule 115 applies in this case]{.underline}
When payment is not received before filing the return, Rule 115 applies.
Under Rule 115:
- Foreign income must be converted into INR
- The SBI Telegraphic Transfer Buying Rate (TTBR) must be used
- The rate of the last date of the month before the month in which services were provided must be used
This is the only time RBI rates and bank credited amounts are ignored.
Now comes the real work. Once the conversion rate is clear, the next step is filing income tax on the website.
How to pay Income tax yourself
All online tax payments happen on the [[Income Tax Official Site]{.underline}](http://www.incometax.gov.in)
Inside this website, tax is paid through a section called e-Pay Tax.
You can pay tax:
- After logging in, or
- Without logging in
Both methods are valid. Logged-in payment makes tracking easier.
What you must keep ready before paying tax
Before opening the website, keep these ready:
- PAN number
- Assessment Year (it is 2026-27 for this financial year)
- Type of tax you are paying (advance tax before 15th March 2026, Self assessment tax after 15th March 2026)
- Tax amount
- Net banking, debit card, credit card, or UPI
Wrong assessment year or wrong tax type creates mismatches.
Which tax you are paying
As a freelance remote worker, you will pay Advance tax before 15th March 2026. After that, the correct option is Self Assessment Tax.
Advance tax means:
- You calculated your tax
- You are paying it before the financial year ends
Self Assessment Tax means:
- You calculated your tax
- You are paying it before filing the return
[Step 1: Log in to the Income Tax portal]{.underline}
- Open [[www.incometax.gov.in]{.underline}](http://www.incometax.gov.in)
- Log in using PAN and password
- Complete OTP verification
After login, the dashboard opens.
[Step 2: Open e-Pay Tax]{.underline}
From the dashboard:
- Click e-File
- Click e-Pay Tax
- Click new payment
You are now on the tax payment screen.
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[Step 3: Select Income Tax payment]{.underline}
On the payment options:
- Click Proceed on the Income Tax box
{width="6.5in" height="2.9166666666666665in"}
[Step 4: Select assessment year and tax type]{.underline}
Now select:
- Correct Assessment Year (2026-27 for this financial year)
- Advance Tax (100) (as we are paying before 1st April 2026, it will be self-assessment tax after that)
For freelance remote workers, this is the correct option.
Click Continue.
[Step 5: Enter the tax amount]{.underline}
On the next screen:
- Enter the total tax amount
Interest and penalty fields should remain empty. The amount is automatically adjusted from the tax amount.
Click Continue.
[Step 6: Select payment mode]{.underline}
Choose Payment Gateway.
This allows payment through:
- Net banking
- Debit card
- Credit card
- UPI
Click Continue.
Transaction charges apply in this mode. These charges are separate from tax.
[Step 7: Verify details and proceed]{.underline}
A preview screen appears.
Check carefully:
- PAN
- Assessment Year
- Self Assessment Tax selected
- Tax amount
If details are correct:
- Click Pay Now
Step 8: Complete payment on bank page
You will be redirected to the bank or payment gateway page.
Here:
- Accept terms
- Choose payment option
- Complete payment
[Step 9: Download and save the challan]{.underline}
After payment:
- SMS confirmation is sent
- Email confirmation is sent
- Challan is generated
You must:
- Download the challan
- Save it in your tax folder ( or print it like the oldies)
This challan proves that tax is paid.
For freelance remote workers under Section 44ADA:
- 100% tax payment before 15th March is required (on the professional income, the taxes on rest of the income needs to be paid on quarterly basis)
- Advance Tax is the correct option
- No employer deduction exists
Understanding this process avoids confusion and intimations.