Legal Rights And Precautions That Every Freelancer In India Must Be Aware Of

When you first hear the word “freelancer”, you may interpret from the word “free” that he/she provides services “free of cost”. This perception, although to many, is essentially wrong. A freelancer is a person who is not committed to a particular place of work, employer, or a term, but is self-employed and provides services to several at one time. Musicians, web-designers, journalists, writers, performers, among many others, could be taken up as freelancing professions. However, freelancing is not as easy as it may seem to be. Let’s see how.

Will it be fair if you book and stay in a hotel and not end up paying on the pretext of not liking the services provided by the hotel staff? Or imagine you sit in an auto or a cab and only pay half the amount decided because you never had the full money to pay them in the first place? Your answer is (hopefully) a “no”, right? This behaviour seems unfair, moreover not doable. However, this is exactly what freelancers have to go through.

We know that money is important to everyone and no one provides services in the market for free. Then why do freelancers have to face issues of non-payment or part-payment? They are “expected” to work for free, and are even exploited upon this expectation. Read on to understand how you can avoid such exploitation by knowing your legal rights as a freelancer and by being cautious. 


Do you own your work?

Is your work your own or it belongs to the person you made it for, or the one who has promised to pay you for it?

Thankfully, any work that is created by you belongs to you. However, most often a freelancer’s work is taken to be as the client’s work or attempted to be stolen, thus robbing the freelancer’s right to get credit – both in terms of acknowledgement and money. A freelancer should always keep in mind that they have a copyright over all their creations. Only you can decide who should / can use it and the way in which it could be recreated, unless of course you make and sign a contract stating otherwise.

Freelancers can license their work to others and at the same time retain the right to use it for their own websites, books, projects etc. However, you should be aware of the difference in giving everything away forever (assignment) and giving away a portion for a little duration of time (licensing).

Moreover, as you have the copyright, you can also recreate your previous work for another client, without an objection from the first client. As long as you do not have an agreement stating any transfer of the right of such work, you continue holding the copyright for it and have the right to choose whatever you wish to do with it later.


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Should you insist on an agreement?

Whenever a client asks for work, you probably just give a thumbs up and get going with delivering your work, without taking the pain to enter into an agreement with him. This way, you put yourself at a massive risk of being cheated upon in terms of non-payment, no extra payment for extra work, your content being stolen, etc.

Signing a written contract with clear terms is a prerequisite and more important than you think it is. The help of a lawyer is suggested to be taken while drafting the agreement as he can frame the clauses keeping your best interest in mind. The several clauses that you must define and add in your agreement are as follows:

  1. Basics: Names of parties (client and freelancer), names of the organisations and addresses are the basic information that goes into every contract.
  2. The Work: Clauses related to work should include what kind of work will be done by you, how much of it and how it can be used by the client. Tasks expected out of the client and the freelancer should be mentioned.
  3. Schedule of Payments: But of course, this is the most important clause and most part of the reason why we would ever enter into a contract with the client. Payments- how much and for what work, the method, and also whether the freelancer is to be paid on hour or work basis, and if any other variable is to be considered and how, should be clearly stated. How additional charges for additional work will be handled must also be mentioned to avoid disputes.
  4. Deadlines: The duration and deadline by which the work will be completed by you should be given clearly.
  5. Termination: Every contract must contain a clause stating how and when an agreement will be terminated. A cancellation clause should also be on it stating instances when the contract would stand cancelled.
  6. Confidentiality: In the contract, a clause stating that the work and information that you provide to the client would not be disclosed to any 3rd party outside must also be mentioned.
  7. Dispute Resolution: When a freelancer and a client have a dispute without any agreement stating what to do in such a situation, a freelancer often falls prey as the client is generally a much stronger party if it is a company. A clause to that effect hence should be a part of the agreement, stating what course of action to take when a dispute arises- whether arbitration, negotiation or a court case. If a dispute ever does arise, you should take the advice of a lawyer who will guide you best regarding the legal recourse.


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Taxes – what a freelancer must know

Freelancers work on specific assignments and receive remuneration or fee for the work. They are not employed by anyone. Taxes for such incomes and for such professions can surely be a confusing aspect. As a first step, you need to calculate your gross income for the year. You could also take the help of a CA for your calculations and filings.

Considering the change in the tax regime in the country with the advent of GST, a freelancer needs to figure out if he falls under its ambit. There are fixed slabs under which the turnover is calculated, and you have to pay GST or require a GST number in accordance with that.

If required to do so, and yet the freelancer opts not to register and collect the GST, the Government will be able to track it either through Tax Deducted at Source (TDS) or through payments in the PAN and Aadhar linked bank accounts. Non-compliance with tax laws may lead to penalty.

A freelancer also needs to be aware of TDS. Entities you enter into a contract with or work for may deduct tax at a flat rate on all your earnings/fee as per the law. However, you can get some of this money back from the government by claiming tax refund. Income Tax Return (ITR) should be filed under the appropriate ITR Form.

There are several ways in which freelancers can save taxes. Expert advice should be taken for this, and for registration, the filing of returns, and invoices.


You can safeguard your legal name, logos and symbols that you use to represent your work or product in order to gain credibility and create a niche in the market for yourself. For this, you may apply for a trademark with the help of a trademark lawyer at the appropriate Govt. office. However, you should avoid using unauthorized or others’ trademarks in your work.

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Other Considerations

Apart from the aforementioned points, a freelancer should always make sure that he researches the client before accepting work or entering into an agreement with them. This could especially give an insight into their reputation with payments. Checking directories, websites, reading reviews, etc. could be done to ensure credibility of the client.

Many freelancers are now also turning to third-party websites that act as mediators between the client and the freelancer. This gives some security about timely payments as well.

A freelancer should also always only give real and doable targets to the clients to avoid problems in the future. If you’re saying yes to work you know is not possible or doubtful, you ought to know the consequences of it.

Be safe, smart and cautious and you will be successful!


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