What Worries an Indian Freelancer?
India is the largest freelancer market in the world and is poised for growth. As per a recent study by PayPal, one-in-four freelancers in the world is from India. Also freelancing is witnessing a huge growth both in number of freelance workers and the growth of Income of these freelancers.
It is estimated that India could have up to 20 million ‘freelancers’ — who use computers/internet to offer services in both domestic and foreign markets. There is also an industry estimate of the Indian ‘freelancers’ market size growing to whopping $20–30 billion by 2025.
Now while these are some good set of numbers to lure more individuals to opt for a freelancing career, here we are evaluating the key challenges which Indian Freelancers are facing today.
Invoice Generation
Most of the Indian Freelancers rely on Paypal and other online portal for their invoicing needs, this leaves them with very limited options to customise, also they have no tool for their clients outside one platform. This also brings inconsistency in invoices. Also there is no MIS for all the invoices generated from various sources.
Payment Collection
Another major challenge for Indian freelancers is collection of payment. While most of the international collections are made through PayPal or through wire transfer. There is no formalisation in local payment collection. Collection of payment of freelance work done for Indian clients remains a challenge. Most these payment are channelised either through Paytm or Bank transfer but mostly without invoice.
Compliance
Compliance is the biggest challange for Indian freelancers. While they are not required to register for GST unless their turnover crosses INR 20 lakhs, however if their client asks for a GST invoice, then they are required to register even when the turnover is less then 20 lakhs. In such scenario they are either required to appoint a tax consultant and pay anywhere between INR 15K to 25K or spend crucial time of their own learning the whole process.
Also compilation of invoices from different sources becomes another challenge in such situation.
Issuance of Foreign Inward Remittance Certificate (FIRCs)
Freelancer exporting their services and receiving payments through wire transfer are required to furnish FIRCs to be eligible for refund of local taxes paid (mostly GST). In most of the cases the local bank refuses to furnish FIRCs or take unnecessary longer time to issue. This blocks the capital of freelancers in credit refund. Instant FIRCs from banks can boost the liquidity for freelancers.
Conclusion
While there are few challenges, there are greater number of opportunities for freelancers as the global economy shifts form legacy to gig economy.
If you are a freelancer and facing similar challenges, we’re all ears to solve it for you.
