Freelance vs salary calculator
Freelancers and consultants in a specified profession can use presumptive taxation, still known as section 44ADA: half the billing is treated as income and taxed, with no books to keep. Enter your annual billing and costs to see the monthly in hand, and the salaried CTC that would leave you with the same.
Your contract
24 lakh a year, ₹2,00,000 a month, before GST
Laptop, software, internet, coworking, accountant
80C, 80D and NPS combined; the cheaper regime is picked for you
Freelance in hand per month
₹1,91,667
To match it, a salaried job needs a CTC of ₹31,40,000 (31.4 LPA). The same 24 lakh as a CTC leaves ₹1,54,545 a month.
- Taxable (50% of billing)
- ₹12,00,000
- Income tax / year
- ₹0
- Matching CTC
- 31.4 LPA
- Regime
- New
The same 24 lakh, two ways
| Per year | Freelance | Salaried |
|---|---|---|
| Billing or CTC | ₹24,00,000 | ₹24,00,000 |
| Taxable income | ₹12,00,000 | ₹21,81,000 |
| Income tax and cess | − ₹0 | − ₹2,55,060 |
| Business costs | − ₹1,00,000 | ₹0 |
| EPF, yours and employer's | ₹0 | − ₹2,88,000 |
| Professional tax | ₹0 | − ₹2,400 |
| In hand | ₹23,00,000 | ₹18,54,540 |
| Plus savings locked in EPF | ₹0 | ₹2,88,000 |
Before you switch
- Above ₹20,00,000 of turnover you must register for GST. Domestic clients pay 18% GST on top of your fee; exports are zero rated under a letter of undertaking.
- There is no employer PF, gratuity, group health cover or paid leave, so budget for health insurance and an emergency fund out of the in hand figure.
- Presumptive income pays its advance tax in one instalment by 15 March. Clients deduct 10% TDS on professional fees, which you claim back against that tax.
Questions
Resident individuals in a specified profession: legal, medical, engineering, architecture, accountancy, technical consultancy, interior decoration, film, company secretary and information technology work. Receipts must stay within ₹75 lakh a year when no more than 5% arrive in cash, or ₹50 lakh otherwise.
Yes. The new regime 87A rebate covers total income up to ₹12 lakh for any resident individual, so presumptive income up to ₹12 lakh, which is billing up to ₹24 lakh, pays no income tax. The ₹75,000 standard deduction is only for salary and does not apply.
Once service turnover crosses ₹20 lakh in a year, or ₹10 lakh in some special category states. Exports of services to foreign clients are zero rated under a letter of undertaking but still count toward the threshold.