Income Tax for Freelancers in India

Preface: This post was originally published in 2019 and has been updated on October 16, 2025, to provide you with the most current and accurate information.

Freelancing is a great career option for those who want the freedom to work with multiple organizations while maintaining their independence, both personally and financially. However, it can lead to complications when it comes to filing ITR. 

Unlike salaried employees, freelancers have various sources of income, and their tax returns must accurately reflect that. Therefore, understanding income tax for freelancers in India is quite essential. In this blog post, we will shed some light on this topic.

How does Income Tax Department see Freelancers?

As a freelancer, your income comes from your manual and intellectual skill. From the context of the income tax department, your income comes under the Profit & Gains of Business and Profession. 

Therefore, you are an entrepreneur who runs a flexible business organization with no form, but only a name: your name. The businesses you work for are your customers and the income earned from different clients has to be reflected in your ITR. 

TDS for Freelancers in India 

TDS refers to Tax Deducted at Source. Every professional service you provide as a freelancer is subject to a TDS of 10% u/s 194J of Income Tax Act 1961. Just like salaried individuals, you can claim a refund of the TDS amount at the time of income tax return filing.

If you need a tax calculator for freelancers in India, you can check out Registrationwala’s Freelancer Income Tax Calculator.

Presumptive Taxation Scheme for Freelancers

There are two ways through which the freelancers can file ITR i.e., under regular scheme or via Presumptive Taxation Scheme under Section 44ADA. Under the regular scheme, detailed bookkeeping is required and the taxation is based on actual profits. However, the Presumptive Tax Scheme offers a simplified fixed-rate method for eligible taxpayers. 

ITR filing for freelancers under the latter scheme makes tax computation and compliance simpler. Therefore, there is no need to panic when paying the taxes. Under this scheme, if the total gross receipts are up to Rs. 50 lakhs in a financial year, tax is calculated on 50% of that amount. Moreover, the limit increases to Rs. 75 lakhs if cash transactions are 5% or less of the total receipts.

How to Reduce Taxes You Pay as a Freelancer?

Under certain circumstances and certain sections, you can reduce the taxes you pay. They all come under deductions. If you’ve had additional expenses, you can add them to the deductions while filing ITR for freelancer and reduce the amount of tax that you are paying. These expenses are:

1. Rent

2. Repairs

3. Depreciation

4. Office expenses

5. Meals

6. Entertainment

7. Hospitality

8. Traveling expenses

How to File ITR for Freelance?

Here are the steps you need to fulfill to file your ITR as a freelancer:

Step 1: First and foremost, you need to determine the total income you’ve earned as a freelancer during the financial year from April 1st to March 31st.

Step 2: Then, the next step is to evaluate the eligible expenses and deductions that you can claim for the given financial year.

Step 3: Based on your income level and whether you’ve chosen the presumptive taxation scheme, select the appropriate ITR form, i.e., either ITR-3 or ITR-4.

Step 4: Finally, log in to the Income Tax e-Filing portal and fill in all the required details in the appropriate form accurately.

Conclusion

Just like salaried individuals and business taxpayers, freelancers are also required to file their ITR and pay the applicable taxes. Depending on their income level and whether they have chosen the presumptive taxation scheme, freelancers must file either ITR-3 or ITR-4. After submitting their return, they will receive a notification once it has been processed. Need assistance in freelance income tax return filing? Connect with our tax experts at Registrationwala!

Frequently Asked Questions (FAQs)

Q1. What is the TDS for freelancers in India?

A. TDS for freelancers in India is 10% under Section 194J of IT Act 1961.

Q2. Which ITR form to file for freelancer?

A. The prescribed ITR form for freelancers is either ITR-4 (Sugam) or ITR-3. The form applicable in freelancer’s case depends on their income level and whether they choose the presumptive taxation scheme. 

Q3. Which form is required for tax filing for self employed individuals?

A. Self employed individuals in India either use form ITR-4 or form ITR-3 for ITR filing, depending on their income level and whether they opt for the presumptive tax scheme. 

Author: Dushyant Sharma

Hey there, I'm Dushyant Sharma. With the extensive knowledge I've gained in past 8 years, I have been creating content on various subjects such as banking, insurance, telecom, and all the important registration and licensing processes for various companies. I'm here to help everyone with my expertise in these areas through my articles.