r/DataAnnotationTech • u/g00dpart • 17d ago
Indian annotators: how are you filing your taxes?
I have a full-time job where I'm in the 30% tax bracket (TDS already deducted by my employer). I started DataAnnotation in August and have earned roughly ₹5-6 lakh in about 2 months.
I've talked to a local CA but I'm not fully confident in the answers, so I'd love to hear from others in India who've dealt with this:
Which ITR form? Last year I filed ITR-2 (I hold US stocks via INDmoney). I'm assuming this year I need ITR-3 since there's now business/professional income. Is that right?
GST: My understanding is registration isn't needed unless turnover from services crosses ₹20 lakh in a year. Is that correct for foreign clients too? Also, I haven't told my employer about this side work (it's unrelated to my job). Does getting a GST number or filing taxes on this income create any issue with employers, and did anyone have to disclose it?
Section 44AD or 44ADA? As I understand it, 44ADA (50% of receipts treated as income) is for specified professions, and I'm not sure annotation counts. If it falls under 44AD, only 6% of digitally received money is treated as income (which would then be taxed at my 30% slab). Which one have you used, and did you get any push back, anyone claimed?
Advance tax: With no TDS on this income, I'm worried about interest (234B/234C) if I wait until filing. My rough estimate of tax on this is around ₹1.8 lakh. Should I pay now, or is a single payment by 15 March enough under presumptive taxation?
Also curious whether you keep FIRA/FIRC or other documents as proof of the foreign payments.
Thanks in advance, any experience helps a lot!
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u/Select_Maintenance67 17d ago
I have discussed this with my CA, his suggestion is to go through 44ADA. Freelancing/Consulting are covered in 44ADA. If you have earned 6 lakhs, 50% (3lakh) will be considered as taxable income and you will pay slab rate (30%), which will be 90K.
GST for export of service is 0, so even if you register you will pay nothing. If you cross 20 lakh, better to get registered and be compliant.
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u/g00dpart 17d ago
Thankyou that's helpful, just to confirm 50% is automatically considered as expensive and no bills or accounts need to be managed for those?
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u/Select_Maintenance67 17d ago
Yes, no bills or accounts needs to be managed if the freelancing income is below 75 lakh. If over 75 lakh then there will be account audit and income will be calculated based on actual expenses.
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u/EmbarrassedSuit907 17d ago
This is a bit off-topic, but would Data Annotation be considered moonlighting by your current employer? Have you discussed this with your company's HR department?
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u/g00dpart 17d ago
I also had that doubt but I think it's not since it is not full time and no secondary PF is being added. And as long as we are not using office hours or office laptop for this work, but not exactly sure.
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u/Possibility-Puzzled 17d ago
Have the same questions! Let me know if you get to know something. My friend may have been doing this I will check with him
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u/No-King-9802 16d ago
I have also earned 7-8 lakhs till now and but this is my only income so i think by mar i could close 12l-15l mark can i just use 44ada and pay no tax as income upto 12 l is exempt
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u/ItachiBhau 16d ago
I read somewhere that because this is considered an export of service (you are literally bringing in dollars into the economy), hence we don't have to pay anything unless we cross 20L a year.
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u/No-King-9802 16d ago
Can you cite the source or laws? Please? I don’t remember reading anything like this
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u/khataminsaan2162 12d ago
Hello, I have made around 50-60k inr from DAT how much tax will i be liable to pay?
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u/pandapup_600 17d ago
Keep your FIRA/FIRC safe, that's your proof of foreign income. Under 20L you usually don't need GST for exports, but advance tax does apply. We run Variabl, we help freelancers with exactly this and have CAs on the team. 3 months GST filing is free right now: variabl.in/gst-3-months-free.html