Best Tax Saving Plans for Freelancers and Creators in India
Freelancers and digital creators in India are often unaware of the tax-saving opportunities available to them. Unlike salaried individuals, freelancers don’t have the benefit of automatic TDS deductions, employer contributions, or structured tax planning. But the good news is the Income Tax Act offers several ways to reduce your tax burden legally if you know how to use them.
Choose Between Old and New Regime
Before you begin planning, decide whether to opt for the old tax regime (with deductions) or the new regime (with lower rates, but fewer deductions). Most freelancers benefit more from the old regime because they can claim multiple deductions.
Use a tax calculator or consult a CA before finalizing your decision for the financial year.
Use Section 80C to Your Advantage
As a freelancer, you can claim up to ₹1.5 lakh under Section 80C. This includes investments such as:
Public Provident Fund (PPF)ELSS mutual funds (Equity Linked Saving Schemes)
Life insurance premiums
National Savings Certificates (NSC)
5-year tax-saving Fixed Deposits from banks
These not only help you save on taxes but also build long-term financial security.
Claim Business-Related Expenses
Freelancers and content creators are allowed to deduct business expenses from their total income before calculating tax. This is a huge benefit often missed.
You can claim:
Laptop or desktop purchases
Internet and phone bills
Camera, tripod, lighting (for content creators)
Subscription services (editing software, cloud storage)
Travel expenses for work
Office rent or home office setup costs
Make sure to maintain bills, invoices, and receipts to support these claims.
Use Section 80D for Health Insurance
Under Section 80D, you can claim:
Up to ₹25,000 for health insurance premium for self, spouse, and children
Additional ₹25,000 for parents (₹50,000 if senior citizens)This is a great way to protect your health and wealth at the same time.
Claim Depreciation on Assets
If you're a YouTuber, gamer, or photographer who invests in expensive equipment like cameras, laptops, or lighting setups, you can claim depreciation under the Income Tax Act.
Depreciation reduces your taxable income over several years. This is especially useful for creators who regularly upgrade their gear.
Open a NPS Account
The National Pension System (NPS) gives an additional deduction of ₹50,000 under Section 80CCD(1B), over and above the ₹1.5 lakh from Section 80C.
It helps save taxes and build retirement wealth. You can open an NPS account easily online via NSDL
Set Up a Separate Bank Account
It’s a good practice to keep your freelancing or creator income in a separate current or savings account. This helps in tracking income, claiming expenses, and filing taxes more cleanly.
File Your ITR on Time
As a freelancer, your income falls under “Profits and Gains from Business or Profession” (Presumptive Taxation under Section 44ADA for those with income under ₹50 lakhs).
By opting for 44ADA, you can show 50% of your total income as taxable and claim the rest as expenses without needing to show proof.
Example: If your total receipts are ₹10 lakh, you only pay tax on ₹5 lakh (standard deduction). No need to show individual expenses if you go this route.
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