What a software freelancer pays at different income levels for TY 2026-27, which expenses count, and how TDS, GST and presumptive tax apply.
Quick answer
A software freelancer with ₹18 lakh of yearly receipts and about 12% in business expenses pays roughly ₹1,22,300 in income tax for TY 2026-27 under the better regime: about 6.8% of receipts. Income is taxed as business or professional income at slab rates.
| Early career | Established | Top earner | |
|---|---|---|---|
| Yearly receipts | ₹5,00,000 | ₹18,00,000 | ₹60,00,000 |
| Expenses (~12%) | ₹60,000 | ₹2,16,000 | ₹7,20,000 |
| Tax: new regime | ₹0 | ₹1,22,300 | ₹13,31,620 |
| Tax: old regime (no deductions) | ₹0 | ₹2,99,210 | ₹15,97,600 |
| Tax with presumptive (58) | ₹0 | ₹0 | ₹4,99,200 |
| GST registration | Not yet | Not yet | Required |
Estimates for Tax Year 2026-27 · Income-tax Act, 2025. Residents, no other income or deductions. Presumptive column uses section 58.
Calculate your own taxUsually eligible for 44ADA
Information technology is a notified profession, so freelance developers can usually opt for 44ADA and declare 50% of receipts (limit ₹50 lakh, or ₹75 lakh if cash receipts are within 5%).
Compare presumptive vs actualIndian clients usually deduct 10% u/s 194J (professional) or 2% (technical services). Foreign clients do not deduct Indian TDS.
Software services to foreign clients are export of services (zero-rated). Once total turnover crosses ₹20 lakh you must register, even if all clients are abroad.
Only with regular books, not under presumptive taxation.
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