Legal formalities for freelancers work form home


Hi,

I want to know what are the legal formalities for the freelancers like graphic desiners, web developer who works from home. Some clients are from outside of India, they pay me through paypal,and my paypal is connectd to my bank's saving account. (Do I need a current ac in bank?)

1. Do I need a trade licence from the Municipality to start? If I don't need trade licence, then if some client ask for invoice, is it legal to generate a invoice without trade licene?
2. What kind of tax should I pay? Service tax? Professional tax?

Any help would be greatly appriciated. Thanks in advance.

 
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Scientist/Engineer

If you do not display sign board with the name of your profession and you do not have salaried employees,  there will be no problem with the municipality. If you are in a co-operative housing society and if there are cranks in the managing committee they can give you problem. But you do your business quietly.  You can have savings account with a bank. Your income will be taxable under the head "Profits and gains from business and profession". Return form ITR-4 will be applicable. Your gross income minus your expenditures on the business only will be taxable. You will have to maintain an income and expenditure account for this purpose. You will be liable to service tax only if your gross income exceeds a certain limit. Years ago it was Rs.10 lakhs. I do not know how much it is now. 

You can generate invoice under your personal name or under your business name if you have one. It is better to have personal name only.

You go about your business without worrying about anything. Face problems, if any, as and when they come. You can easily get over the problems.

 
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Advocate&consultant

1. No need to have trade license, since you are working from home.

2.You can give the invoice on the name through which now working or in your personal name.

3.Professsional tax will be attracted.

srishaila, advocate,bangalore,9741425514

 
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Thank you so very much for  reply. I'm deeply grateful for all your guidance. It really helps me a lot. Surely, now I can concentrate more on  design and business side of it, rather than worring unnecessarly ...

Thanks once again.

 
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