Your Essential Guide to Freelance Tax Filing in India

What Counts as Freelance Income (And Why It Matters)

Freelance income includes payments for services, retainers, project fees, royalties, referral bonuses, and platform payouts from marketplaces. Whether you invoice directly or receive via portals, it counts as professional income. Keep everything traceable with formal invoices and a dedicated bank account.

What Counts as Freelance Income (And Why It Matters)

If you work with overseas clients, collect bank statements and purpose codes, plus FIRC/advices when available. These help prove export-of-service income and support GST positions. Track conversion rates and charges so your books reflect true rupee amounts—not just what the client wired.

Presumptive vs. Regular: Choosing How You’re Taxed

Under Section 44ADA, eligible professionals can declare a fixed percentage of gross receipts as profit, simplifying bookkeeping. The eligibility limit is typically up to 50–75 lakh depending on digital receipt conditions. It’s a time-saver if your actual expenses are low. Subscribe for a calculator we share next week.

Presumptive vs. Regular: Choosing How You’re Taxed

Choose the regular method if your genuine expenses are significant—software, subcontracting, equipment, and travel. You maintain books, claim real costs, and pay tax on net profit. This can reduce taxes for scale-ups, but adds compliance. Ask us for a clean, freelancer-ready expense tracker template.

New vs Old Tax Regime for Freelancers

Highlights of the new regime

The new regime offers lower slab rates but limits many deductions and exemptions. It’s simple, great for those with fewer investments and deductions, and now the default. Still, compare your numbers before finalizing. Comment “NEW” if you want our quick checklist to test your fit.

Service providers typically register when annual turnover crosses the statutory threshold (often 20 lakh in most states, 10 lakh in some special-category states). Inter-state services no longer automatically require registration, but watch your actual supplies and client needs. Unsure? Ask us with your state and revenue.

A GST invoice needs mandatory fields like GSTIN, SAC code, taxable value, and tax rate if applicable. If registered and eligible, you may claim input tax credit on business purchases. Keep vendor GST details clean, reconcile GSTR data, and file on time to keep credits intact.

Supplying services to foreign clients can be zero-rated if conditions are met. Many freelancers file a Letter of Undertaking (LUT) to avoid paying IGST on export invoices. Maintain clear proofs: contracts, emails, payment receipts, and bank advice. Want an LUT prep checklist? Comment “LUT” and we’ll send it.

Clients often deduct TDS on professional fees—frequently at 10% under Section 194J when thresholds are met. Ensure your PAN details are correct, collect TDS certificates, and verify credits in Form 26AS. During filing, claim the TDS to reduce your final payable. Share your TDS puzzles—we love solving them.

Step-by-Step: Filing Your Return Like a Pro

Professionals using presumptive taxation under Section 44ADA often use ITR-4 (subject to eligibility). Those maintaining books and reporting actual profits typically use ITR-3. Check current-year instructions because rules evolve. Comment your method—44ADA or regular—and we’ll confirm your likely form.

Step-by-Step: Filing Your Return Like a Pro

Collect invoices, bank statements, expense proofs, depreciation details, Form 26AS, AIS/TIS, and any TDS certificates. Add investment proofs, insurance premiums, and donation receipts if using the old regime. A simple folder per quarter streamlines filing—and saves you hours in the final week.