Is freelancing a better solution at times of recession?


#1

Is it advisable to quit the current job at times of recession and get a new job after 5-6 months? My friend gets frequent freelance projects in photography. So he was just wondering if it is a better option to quit his job during recession and finding a new one once things gets better. Meanwhile he can concentrate more on the freelance projects.


#2

The economic growth is low currently. Many people have lost their jobs and it is not advisable for someone with dependents to quit job at this time unless your friend is earning good from freelancing.

Freelancing has not yet caught the fancy of employers in India because most employers prefer permanent employees. Moreover, in the time of low economic growth, companies cut their freelancers or contract workers because there is not even enough work for the permanent employees.

It is, at the end of the day, a subjective call that your friend has to take depending on how much he needs, how much he has in saving, and what does he expect to do after quitting job. Frankly I don’t see any reason why your friend wants to leave the job.
Another very important question is whether the economy will take off at all. Many economists have predicted that Indian economy will grow at a moderate rate of 5% to 6% for next couple of years.


#3

As a freelancer can I use ITR form 4s to file my ITR?


#4

For all working professionals including freelancers, income tax returns should be filled using form 4 and not form 4s. So as a freelancer you need the ITR 4 form to file your income tax return. Keep all the receipts of your expenses and payments with you as they may be needed if the income tax department seeks further information. If your clients are deducting TDS then you will also need to get the details of all such TDs deductions by submit form 16A listing all your TDS deductions.


#5

Hi Sohini,

Income Tax Return (ITR) or ITR-4 is usually filed by anyone who is running a business or if they belong to a profession. There is no minimum income required for an individual to file their return using this form. ITR 4 is used by many individuals, including those who are shopkeepers, doctors, construction contractors, freelance teachers, wholesalers, insurance agents and interior decorators.
ITR-4S forms are for taxpayers who have opted for the presumptive income scheme as per Section 44AD and Section 44AE of the Income Tax Act.

In your case, since you’re using ITR 4S, you have to pay advance tax by March 15th. You do not need to comply with the requirement of quarterly instalment due dates of advance tax.

The benefit of paying advance in one instalment by the 15th of March only applies to the business for which this scheme was opted for. If you have income from any business apart from the one mentioned above, and your tax liability exceeds Rs. 10,000 in a year, then you have to pay advance tax such income.

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