The ITR filing process for freelancers in India is varies from that of salaried individuals. Freelancers involved in legal, medical, architectural, accounting, engineering, technical consultancy, film, interior decoration, and similar other professions can file ITR.
Freelancers belonging to non-specified areas, such as CA, doctors, lawyers, etc., can also file income tax returns.
Now the question arises, how to file ITR for a freelancer? Here’s the following stepwise guide:
Step 1 - Calculate the gross income from 1st April to 31st March of the given fiscal year. Omit any debt obligations such as loans as it is not considered as income.
Step 2 - Compute expenses incurred in freelance business to claim a tax deduction.
Step 3 - Select the following appropriate form and fill in the essential information-
• The ITR-3 applies to individuals benefiting from business profits. Such individuals might carry on such business or profession with returns including incomes from house property, capital gains, salary/pension, etc.
• ITR-4 applies to people choosing presumptive income schemes as per the Income Tax Law Section 44AD, 44ADA and 44AE. If freelancers belong from professions under Section 44ADA, have business incomes as specified in Sections 44AD and gross receipt from profession does not exceed ₹50 Lakhs, ITR-4 Form will be applicable.
Individuals can either download the forms from the official portal of the Income Tax Department, fill them in offline and upload the XML file in this IT portal. Alternatively, individuals can fill them in the portal and submit forms after digital verification.
Step 4 - Fill in the necessary details such as taxable income, deductions, expenditures, paid advance tax.
If the gross receipt from profession exceeds Rs 50,00,000, then individuals need to get an account by Chartered Accountant u/s 44AB, In case of the audit the assessee need to file income tax return before 31st October. And in case the assessee gross receipt does not exceed rs 50,00,000, he may opt the provision of 44ADA and file the return before 31st July.