Freelancers need to file ITR by 31 August: Forms, income reporting rules, tax methods and deductions explained

Freelancers earning income through independent professional services need to ensure they file their income tax return (ITR) within the applicable deadline. For assessment year (AY) 2026-27, the due date is 31 August for taxpayers who are not required to get their accounts audited.

Nishant Shanker, Tax & Investments Expert, Navraj Global Advisors, shared key insights on ITR filing requirements for freelancers, including the applicable ITR forms and taxation methods.

Which ITR form should freelancers file?

Freelancers are generally treated as carrying on a profession or business under the Income Tax Act. The applicable ITR form depends on how they report their income.

• ITR-3: Applicable to freelancers maintaining regular books of account.
• ITR-4: Applicable to eligible professionals opting for the presumptive taxation scheme under Section 44ADA.

For AY 2026-27, the due date is 31 August for non-audit cases and 31 October where a tax audit is applicable, unless extended by the government.

How should freelancers report and reconcile their income?

Freelance income should be reported under the head “Profits and Gains of Business or Profession” in the ITR.

Before filing the return, taxpayers should reconcile their income records with available documents, including:

• Invoices raised and payments received
• Bank account statements
• Form 26AS and Annual Information Statement (AIS)
• TDS certificates
• Books of account or accounting records

For foreign receipts, freelancers should also verify inward remittance records. Maintaining proper reconciliation helps ensure that the income disclosed in the ITR matches the information available with the Income Tax Department and reduces the possibility of receiving tax notices.

How is freelance income taxed?

Freelance income is taxed as business or professional income after deducting eligible business-related expenses.

The final tax liability depends on the applicable slab rates under the tax regime chosen by the taxpayer.

Should freelancers opt for presumptive taxation or regular taxation?

Eligible professionals can choose the presumptive taxation scheme under Section 44ADA, where a prescribed percentage of gross receipts is deemed to be income, reducing the compliance burden of maintaining detailed books.

However, the regular taxation method may be more suitable for freelancers whose actual business expenses are significantly higher or whose income profile does not align with presumptive taxation.

Which expenses can freelancers claim as deductions?

Under the regular taxation method, freelancers can claim expenses incurred wholly and exclusively for their profession. These may include:

• Office rent
• Internet and telephone expenses
• Software subscriptions
• Professional fees
• Travel expenses related to work
• Depreciation on business assets
• Employee-related costs

However, personal expenses cannot be claimed as deductions.

What happens if a freelancer earns income from a foreign client?

Income received from foreign clients is generally taxable in India if the freelancer is a resident and the income is chargeable under the Act.

Freelancers should maintain supporting documents such as:

• Client agreements or contracts
• Invoices
• Bank advice
• Foreign inward remittance certificates, wherever applicable

If tax has been paid overseas, taxpayers should check whether relief is available under the relevant Double Taxation Avoidance Agreement (DTAA) to avoid double taxation in India.

Disclaimer: This is for informational and educational purposes only. The views expressed above are those of the expert and not of Mint. Please consult a qualified expert for the latest laws and regulations.