Indian freelancers for US IT firms: tax, GST, ITR compliance guide

Indian freelancers earning from US IT companies must report income under 'Profits and Gains of Business or Profession'. Isha Sekhri of Isha Sekhri & Associates LLP explains that specified professionals can opt for the presumptive scheme under Section 44ADA, where 50% of gross receipts is deemed income. The gross receipts limit is Rs 50 lakh, or Rs 75 lakh if at least 95% of receipts come through banking channels. Freelancers should convert US dollar income using the SBI TT Buying Rate on the last day of the month before income accrued.

No Indian TDS applies to payments from US companies. US withholding is typically not required if a Form W-8BEN is filed. If US tax is withheld, freelancers can claim a foreign tax credit in India via Form 67. Freelancers must file ITR-3, even under the presumptive scheme, and report foreign income in Schedule FSI. The due date is 31 August without a tax audit, or 31 October with one. GST registration is mandatory if aggregate turnover exceeds Rs 20 lakh, services to US clients qualify as export of services.