By industry · Agencies, consultants & freelancers

Legal compliance for agencies, consultants and freelancers

GST, exports, tax audit, the TDS your clients deduct, and who owns the work you make — what a services business in India owes.

Check what applies to your business — free Compliance calendar

What applies to agencies, consultants and freelancers

What Applies to What it involves Law
Register for GST above ₹20 lakh Service businesses with aggregate turnover above ₹20 lakh — ₹10 lakh in Manipur, Mizoram, Nagaland and Tripura Turnover is counted across your PAN and includes exports. Below the threshold, even inter-state and export service suppliers need not register. CGST Act, 2017, s. 22(1); Notification 10/2017-Integrated Tax
Invoice foreign clients under an LUT Anyone exporting services File a Letter of Undertaking (RFD-11) each financial year before exporting, then invoice without IGST. If payment in foreign exchange does not arrive within a year of the invoice, IGST with interest becomes payable. IGST Act, 2017, s. 16; CGST Rules, 2017, r. 96A
Get a tax audit when you cross the limit Professionals with gross receipts above ₹50 lakh; businesses above ₹1 crore (₹10 crore where cash is 5% or less) Accounts audited and the report filed a month before the return due date — 30 September. From tax year 2026-27 a late report costs ₹75,000 for up to a month and ₹1,50,000 after; FY 2025-26 audits still fall under s. 44AB of the 1961 Act. Income-tax Act, 2025, ss. 63 & 428(c) (formerly s. 44AB)
Consider presumptive tax if you are a professional Resident individuals and firms (not LLPs or companies) in legal, medical, engineering, architecture, accountancy, technical consultancy, interior decoration, IT or company secretary work Declare 50% of gross receipts as income — for receipts up to ₹50 lakh, or ₹75 lakh where cash is 5% or less — with no audit. Income-tax Act, 2025, s. 58 (formerly s. 44ADA)
Reconcile the TDS your clients deduct Professional and technical fees above ₹50,000 a year from one client Clients deduct 10% on professional fees and 2% on technical fees (20% without your PAN). Match the credits against your annual tax statement before you file your return. Income-tax Act, 2025, s. 393 (formerly s. 194J)
Put the ownership of your work in writing Freelancers and agencies creating work for clients Copy, code and design belong to their author unless assigned in a signed, written assignment naming the work, the rights, the duration and the territory — one that states no duration lasts five years. Work made by employees belongs to the employer. Copyright Act, 1957, ss. 17 & 19
Leave non-competes out of your contracts Employment and client contracts A clause that stops someone working after the contract ends is void; restraints during the engagement can be enforced. Indian Contract Act, 1872, s. 27
Register the office, and pay professional tax where levied 10 or more workers for OSH registration; professional tax in states that levy it, such as Maharashtra, Karnataka, West Bengal and Gujarat Register the establishment online under the OSH Code; state Shops and Establishments Acts still apply alongside it, and states differ on whether you need both. Professional tax is capped at ₹2,500 a person a year. OSH Code, 2020, s. 3; Constitution of India, Art. 276(2)

What every business with staff or customers owes

What Applies to What it involves Law
Set up a POSH Internal Committee 10 or more employees — of any kind, including interns and part-timers Constitute the committee by written order, with an external member, adopt a POSH policy, and file an annual report. POSH Act, 2013, s. 4
Register for PF and ESI when you cross the threshold PF from 20 employees; ESI from 10, for staff within the wage ceiling Deduct and deposit contributions by the 15th of each month for the wages of the month before. Code on Social Security, 2020
Handle personal data the DPDP way Any business that collects personal data of customers or employees A clear notice, valid consent, reasonable security safeguards and breach reporting — enforceable from 13 May 2027. DPDP Act, 2023, ss. 5, 6 & 8
Get paid within 45 days as a micro or small enterprise Udyam-registered micro and small enterprises supplying goods or services A buyer must pay within 45 days of acceptance; after that, compound interest at three times the bank rate runs by law. MSMED Act, 2006, ss. 15 & 16

The dates you are most likely to owe

  • GSTR-1 (outward supplies): 11th of every month, for the month before. If late: ₹50 a day (₹20 for a nil return) until filed, up to a cap set by turnover (CGST Act, s. 47).
  • GSTR-3B return and GST payment: 20th of every month, for the month before. If late: ₹50 a day late fee (₹20 for a nil return), plus 18% a year interest on unpaid tax (CGST Act, ss. 47 & 50).
  • TDS / TCS deposit: 7th of every month for tax deducted the month before; 30 April for tax deducted in March. If late: Interest at 1.5% a month on the tax, from the date it was deducted until it is paid (1% a month for any delay in deducting it) (Income-tax Act, 2025, s. 398(3)(a) (formerly s. 201(1A))).
  • Quarterly TDS return (24Q / 26Q): 31 July, 31 October, 31 January and 31 May, for the quarter just ended. If late: ₹200 a day until filed, up to the amount of TDS — and a separate penalty of ₹10,000 to ₹1,00,000 (Income-tax Act, 2025, ss. 427 & 461 (formerly ss. 234E & 271H)).
  • Advance tax instalment: 15 June (15%), 15 September (45%), 15 December (75%) and 15 March (100%) of the year’s tax. If late: Interest on the shortfall, month by month, until it is paid (Income-tax Act, 2025, ss. 424 & 425 (formerly ss. 234B & 234C)).
  • Income tax return — business, not audited: 31 August, for the financial year that ended on 31 March. If late: ₹5,000 late fee (₹1,000 if total income is up to ₹5 lakh), which cannot be waived once triggered (Income-tax Act, 2025, s. 428 (formerly s. 234F)).
  • Income tax return — companies and audited businesses: 31 October, for the financial year that ended on 31 March. If late: ₹5,000 late fee (₹1,000 if total income is up to ₹5 lakh), which cannot be waived once triggered (Income-tax Act, 2025, s. 428 (formerly s. 234F)).
  • PF contributions: 15th of every month, for the wages of the month before. If late: 12% a year interest on the late contribution, and damages on top (Code on Social Security, ss. 127 & 128).
  • ESI contributions: 15th of every month, for the wages of the month before. If late: Interest on the late contribution, and damages that grow with the delay (Code on Social Security, 2020).

Documents a business like yours needs

Work out what a lapse costs

Common questions

Does a freelancer with foreign clients need GST registration?

Not below ₹20 lakh of aggregate turnover — exports count towards it, but inter-state and export suppliers of services below the threshold are exempt from compulsory registration. Above it, register and file an LUT each year to invoice exports without IGST.

Who owns the logo or code I make for a client?

You do, unless you assign it. Under the Copyright Act the author is the first owner (s. 17); an assignment must be in writing and signed (s. 19), and one that states no duration lasts five years.

Can an agency use the 50% presumptive scheme?

Only a resident individual or a firm — not an LLP or company — in a specified profession: legal, medical, engineering, architecture, accountancy, technical consultancy, interior decoration, IT or company secretary work. Designers and marketers are not clearly covered; ask your CA before relying on it.

Before you rely on this

A checklist, not advice for your business. Several of these duties are set by each state, and most depend on your size and how you are registered — confirm with your CA before relying on any one of them.