A high savings rate, sound financial planning and efficient asset allocation are essential for fulfilling your aspirations. A second source of income can further ease the journey towards your goals.
The supplementary source of income can also act as a cushion against a job loss or a pay cut and could even turn into your primary source of income if you are passionate enough about the vocation.
Ask Kolkata-based science teacher Shambo Sen, 29, who got into online tutoring through learnpick.com two years ago. “Online tutoring is financially rewarding. Some of my friends have switched to online training completely as they found it more remunerative than their day jobs,” he explains. “For tutors based in India and students in the US or UK, the fee is around $10 per hour for beginners. Computer science tutors at the college level charge $25-30 per hour,” says Anindya Kar, Co-founder, Learnpick.com.
According to a study conducted by online money transfer and payment processing major Paypal last year, on an average Indian freelancers earn close to Rs 20 lakh— the incomes range from less than Rs 2.5 lakh to over Rs 50 lakh—annually.
The study found that web and mobile development, web designing, Internet research and data entry were key focus areas for Indians, besides accounting, graphic design and consultancy. Online tutoring, content writing and social media influencing, too, could also be highly rewarding.
Pune-based June Biswas, 31, is a data analytics professional. However, her role as an influencer on Instagram, too, helps her net a neat sum—Rs 30,000 to Rs 1 lakh—a month. “Most brands collaborate for one or two posts and pay Rs 10,000-20,000. When a brand enters into a contract for say, 2-6 months, the money could range from Rs 50,000 to Rs 1 lakh for more posts,” she adds. However, the pay is not standardised. “It is linked to engagement rates, geography, language, category, frequency and the quality of content,” says Pranay Swarup, Co-Founder and CEO, Chtrbox.com.
Advent of online portals like freelancer.com, upwork.com, fiverr.com and learnpick.com as also the growing popularity of social media have opened up a plethora of opportunities for part-timers. “Work-from-home and part-time/freelance assignments are amenable to types of work that can be templated and monitored efficiently. Writing, graphic design, IT, sales and data analysis are some examples,” says Neha Bagaria, Founder and CEO, JobsForHer.com, a job portal focused on women job-seekers.
While such gigs can be lucrative, if you are employed with an organisation on a full-time basis, you need to tread cautiously. “As long as the employees are not leaking trade secrets and the assignments do not affect the primary work, employers are likely to be tolerant,” says Kris Lakshmikanth, Chairman and CEO, The Headhunters India, a recruitment consultancy firm.
Senior executives signing up as guest faculties at management professional training institutes is one such example. “Some employers even encourage the practice as guest lectures provide an opportunity to interact with students, seek feedback and enhance the company’s brand value. However, they have to ensure that they do not disseminate any sensitive information related to the employer,” says Mayur Saraswat, Head, Digital, IT and Telecom Vertical, Teamlease Services limited, an HR consultancy firm.
While an employment contract requires the employee to exclusively offer her services to one employer, exceptions are made under certain conditions. “With the prior approval of an employer, an employee may engage in part-time jobs which are not conflicting with the business interest or the expected time involvement of the employer. The critical aspect is consent and knowledge of the employer,” says Pooja Ramchandani, Partner, General Corporate Practice and Head, Labour and Employment Practice, Shardul Amarchand Mangaldas.
Provided your employer has given a go ahead, you can consider teaching assignments, private tuition at home and content writing gigs if you are not employed with a content-driven organisation. “Simple write-ups requiring minimal research or translation services could fetch Rs 1-3 per word,” says Vishal Gupta, Co-founder and CEO, Momspresso, a platform focussed on mothers and kids.
Mumbai-based software professional Rohit Verma, 50, is a regular on the guest faculty and corporate training circuits. He conducts lectures on risk business continuity management at various institutes, apart from safety training and emergency response at schools, colleges and also NGOs. “One training session lasts 2–3 hours and I get paid about Rs 10,000. However, the satisfaction that I derive is far more valuable,” says Verma, who often waives off fees for NGOs.
Before signing up for any part-time project, ensure that you read your contract of employment carefully. “Ordinarily, employees cannot take up any part-time jobs unless specifically permitted under their employment contracts. So, it is important to check the contract. A number of employers put up terms and conditions governing the employment on their websites. It is important to read this as well,” says Rajesh Narain Gupta, Managing Partner with Mumbai-based law firm SNG and Partners.
But what if the contract or employment policy does not offer any clarity? “Where it is not expressly, or in writing, permitted and the contract is silent, employee should seek approval or, at least, inform the employer in writing,” advises Gupta. It is best to proactively disclose such part-time gigs, even if you have engaged yourself for purely altruistic considerations. “Not only must you have a dialogue with your employer, but also ensure that you document it,” advises Saraswat.
The tax impact
Complying with the employer’s requirements is just one part of the bargain, the other critical aspect is dealing with the taxman. Certain professionals like architects, lawyers, doctors, engineers and chartered accountants can opt for the presumptive taxation scheme under Section 44ADA, which specifies the list of eligible professionals. The scheme exempts them from the tedious job of maintaining full set of books of account and getting them audited. However, they will not be able to claim any additional deduction for any business expenses or depreciation on assets.
“If their gross receipts do not exceed Rs 50 lakh, they can file returns under this scheme. The income will be classified as profits and gains from business or profession; 50% of their gross receipts will be added to their total income and taxed as per the slab rate applicable,” says Chetan Chandak, Head, Tax Research, H&R Block, a tax consultancy firm.
If the profession does not qualify for the presumptive taxation scheme, one has to maintain proper books and accounts as required by the rules, calculate net profit and pay taxes accordingly. “If your gross receipts exceed Rs 50 lakh, you will also have to comply with tax audit provisions under Section 44AB,” he adds.