Frequently Asked Questions
Clear answers to the most common confusion points for remote workers.
GST & Exports
I am a freelancer earning in USD. Do I need to pay GST?
If your annual turnover exceeds ₹20 Lakhs, you must register for GST. However, if you are exporting services (client is outside India and you receive payment in foreign currency), your services are 'Zero-Rated'. This means you don't pay 18% tax, but you MUST file an LUT (Letter of Undertaking) and file regular returns to claim this exemption.
What is an LUT and why do I need it?
LUT stands for Letter of Undertaking. It is a document filed with the GST department that allows you to export services without paying IGST upfront. Without an LUT, you would have to pay 18% IGST on your foreign income and then claim a refund later, which blocks your working capital.
Do I need GST registration if I earn less than ₹20 Lakhs?
For pure service providers within the same state, it's not mandatory. However, if you make any inter-state supply (providing services to a client in another state), registration was historically mandatory, though recent notifications have relaxed this for service providers up to ₹20 Lakhs. For export of services, voluntary registration is often recommended to claim input tax credits on your expenses (laptop, internet, etc.).
Income Tax & 44ADA
What is Section 44ADA?
Section 44ADA is a presumptive taxation scheme for professionals (developers, designers, consultants, etc.). It allows you to declare 50% of your gross receipts as profit and pay tax on that, without maintaining detailed books of accounts. The turnover limit for this scheme has been increased to ₹75 Lakhs (subject to cash receipt conditions) for FY 2025-26.
Can I use Section 44ADA if I have foreign income?
Yes, absolutely. As long as you are a resident Indian and fall under the specified professions (engineering, technical consultancy, etc.), you can avail 44ADA benefits for your foreign income.
Which tax regime should I choose: Old or New?
For most freelancers with income up to ₹15-20 Lakhs using Section 44ADA, the New Tax Regime is often beneficial due to lower slab rates and the lack of need for investment proofs (80C). However, if you have significant HRA, home loans, or insurance policies, the Old Regime might still save you more. We offer a comparative analysis to help you decide.