Crypto Tax Freelancer

[Aman414]

Hey Guys, I'm going to start freelancing work i'm mainly going to accept crypto for my designing work, before this was in the 9–5 job now i starting this
i have few questions below

1. do i need a current account?
2. how much tax i have to pay normal slab or 30%
3. if i got the crypto from a client, then he decided to drop the project and i refund him to his given address, do i have to pay tax on that as well?
4. Do i have to create an invoice for each and every transaction?
5. Any important to do Before i start this Freelancing work

 

[TaxWiser]

Hey Guys, I'm going to start freelancing work i'm mainly going to accept crypto for my designing work, before this was in the 9–5 job now i starting this
i have few questions below

1. do i need a current account?
2. how much tax i have to pay normal slab or 30%
3. if i got the crypto from a client, then he decided to drop the project and i refund him to his given address, do i have to pay tax on that as well?
4. Do i have to create an invoice for each and every transaction?
5. Any important to do Before i start this Freelancing work

Hey there! Congrats on starting your freelancing journey!

Here are some answers to your questions:

1. Current Account: While it's not mandatory to have a current account, it's highly recommended. A current account can help you manage your business transactions more efficiently and keep your personal and business finances separate.
2. Taxation: Income from crypto transactions is taxed at a flat rate of 30%, irrespective of your income tax slab. This includes any gains from crypto received as payment for your freelancing work. It's best to consult a tax advisor to understand your specific situation.
3. Refunding Crypto: If you refund the crypto to your client, you generally won't have to pay tax on that amount. However, you should keep detailed records of the transaction to show that it was a refund.
4. Invoicing: Yes, you should create an invoice for each transaction. This helps in maintaining clear records for both you and your clients, and it's essential for tax purposes.
5. Before Starting:

• Register Your Business: Make sure your freelancing business is registered according to local laws.
• Understand Crypto Regulations: Familiarize yourself with the regulations around accepting and transacting in crypto.
• Set Up a Secure Wallet: Ensure you have a secure crypto wallet for transactions.
• Keep Records: Maintain detailed records of all transactions, invoices, and communications with clients.
• Consult a Professional: It might be helpful to consult with a tax advisor or accountant who understands crypto transactions.

Good luck with your freelancing work!

(Source: Conversation with Gemini AI)