Does more billing always mean more money?
Freelancing? Find the fees that cost you money.
- Where one more invoice leaves you with less
- Each tax line, marked
- How far past it you need to go
- You keep₹24.41 L81%
- Costs₹4.5 L15%
- Income tax₹1.09 L4%
What you keep at every fee level
- What you keep
- Cliff: billing more leaves less
- Flat: extra billing adds little
Your inputs
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What this means
- You file under 44ADA: tax on half of what you bill, no books or audit, up to ₹75 L a year.
Why?
44ADA is for listed professions: IT, design, consulting, law, medicine and similar. The limit is ₹75 lakh when at most 5% of receipts come in cash, ₹50 lakh otherwise. Past it, profit is what you actually earn, which is usually much more than half.
- GST costs you nothing but paperwork: business clients claim it back.
Why?
Registration is needed once a year's receipts from services cross ₹20 L. Credit on GST you pay on expenses isn't counted here.
- You keep 77% of the next ₹1 lakh you bill, after costs and tax.
Why?
Marginal relief caps the extra tax just past the rebate limit and each surcharge line, so those spots go flat instead of dropping.
- Cliffs are about a year's total. Moving an invoice into April shifts it to next year.
Why?
Income tax and the 44ADA limit count receipts in the financial year, April to March. GST registration also counts the year so far.
More details
Cliffs to plan around
- 44ADA limit₹75 L – ₹93.17 L
- Inside, you keep up to ₹10.09 L less than at ₹75 L
- Bill at most ₹75 L, or past ₹93.17 L
Next one: ₹75 L. Stay under it, or plan to bill past ₹93.17 L.
How it's calculated
- You keep: billing, minus running costs, minus the income tax it adds to your other income, minus GST you can't pass on, minus the audit fee.
- 44ADA: half of billing is taxed, up to ₹75 lakh (₹50 lakh if over 5% comes in cash). Past it, actual profit is taxed, with books and an audit (about ₹40,000 a year).
- GST: 18% once billing passes ₹20 lakh. Business clients claim it back; exports are zero-rated; consumer clients pay it out of your fee.
- Tax: slab rates with the 87A rebate, surcharge and marginal relief.
- Cliff: a stretch where billing more leaves you less than billing its start.
Credit for GST on your expenses, advance-tax interest and the lower ₹10 lakh GST limit in some states aren't covered.
Tax figures follow Budget 2025 rules, for FY 2025-26 onward.