As per the Income Tax Act, income from such a profession will be taxable under the head ‘Profits and Gains of Business and Profession’.The income earned by a freelancer is also taxable under the same head.
For the purpose of taxation, freelancers have been divided into two categories.
Category 1 - Specified Professionals
Category 2 - Others.
Firstly, in case of a salaried person, TDS shall be deducted by his employer every month automatically so the requirement of payment of advance tax gets dispensed in their case.Whereas in case of freelancing, one has the responsibility to deposit advance tax during the year if his taxes during the year if the amount of tax exceeds Rs. 10,000
Secondly, a salaried person gets Form 16 from his employer covering all income, deduction etc. This facilitates a lot to him while filing his return.Whereas for a freelancer he himself has to jot down all his incomes and expenses during the year and take care of the taxes.