How to File Income Tax Return as a Freelancer in India

Which law and which year applies

The Income-tax Act, 2025 came into force on 1 April 2026 and replaced the Income-tax Act, 1961. It uses a single "tax year" in place of the old previous year and assessment year, and renumbers most sections. The presumptive scheme for professionals, known for years as section 44ADA, is now section 58, and the tax audit provision, section 44AB, is now section 63.

Income you earned in FY 2025-26 (April 2025 to March 2026) is still governed by the 1961 Act, and the return you file in 2026 for that year uses the familiar ITR forms and section numbers. Income from April 2026 onwards falls under the new Act.

The core rules in this guide carry across both. The form numbers and section references differ depending on which year you are dealing with, so check which one applies before you file anything.

New regime or old regime

The new regime is the default. For FY 2025-26 and FY 2026-27 it charges nil tax up to ₹4 lakh, rates rise in steps to 30%, and a rebate makes total income up to ₹12 lakh effectively tax free. The ₹75,000 standard deduction applies to salary, not to freelance income.

The old regime has a lower basic exemption, ₹2.5 lakh for individuals below 60, but allows deductions such as section 80C investments, health insurance under 80D and home loan interest. It usually helps only if your deductions are large.

There is a catch for freelancers. People with business or professional income can opt out of the new regime, but once they come back to it, they generally cannot choose the old regime again. Compare both regimes with real numbers before you commit, and treat the choice as a long-term one.

Presumptive taxation for professionals

Under the presumptive scheme, an eligible professional declares at least 50% of gross receipts as taxable income and does not need to maintain detailed books of accounts. The other half is treated as covering all expenses, so you do not claim rent, internet or depreciation separately.

The scheme is open to resident individuals and partnership firms, but not LLPs, in specified professions: legal, medical, engineering, architecture, accountancy, technical consultancy, interior decoration, and notified professions such as information technology, film artists, company secretaries and authorised representatives. Writers, designers, marketers and content creators should check carefully whether their work fits one of these categories before relying on it. The key limits are:

• Gross receipts up to ₹50 lakh in the year
• Up to ₹75 lakh if cash receipts are no more than 5% of total receipts
• Income declared must be at least 50% of receipts, or your higher actual profit
• Declaring less than 50%, with income above the exemption limit, needs books and a tax audit

Advance tax, ITR forms and due dates

Indian clients deduct TDS on many payments, but rarely enough to cover your full tax, and foreign clients deduct none. If your tax for the year after TDS is ₹10,000 or more, you must pay advance tax: 15% by 15 June, 45% by 15 September, 75% by 15 December and 100% by 15 March. Presumptive taxpayers can pay the full amount in one instalment by 15 March. Shortfalls attract interest.

ITR-4 (Sugam) suits resident freelancers on the presumptive scheme with total income up to ₹50 lakh. It cannot be used if you hold assets outside India, claim relief for foreign tax paid, are a company director or hold unlisted shares. Other freelancers file ITR-3.

For FY 2025-26, the Finance Act, 2026 moved the due date for ITR-3 and ITR-4 filers who do not need an audit from 31 July to 31 August. Audit cases normally have until 31 October, and CBDT has announced an extension to 21 November 2026 for this year.

GST, export of services and LUT

GST registration is compulsory once your aggregate turnover from services crosses ₹20 lakh in a financial year, or ₹10 lakh in special category states. Kerala and most other states use ₹20 lakh. Export receipts count towards this turnover. Below the threshold, a freelancer who supplies only services, including to foreign clients, does not have to register.

Once registered, file a Letter of Undertaking (LUT) in Form GST RFD-11 for each financial year, so you can export without paying IGST. Only registered persons can file an LUT. A supply counts as an export of services, which is zero rated, only when all of these conditions are met:

• You are located in India and the client is located outside India
• The place of supply is outside India
• Payment is received in convertible foreign exchange, or in rupees where RBI permits
• You and the client are not merely establishments of the same person

Foreign clients: FIRC, Form 10F and foreign tax

Payments from foreign clients usually arrive through a bank or payment platform. Get the foreign inward remittance certificate or advice (FIRC or FIRA) for each payment, or download it where the platform provides one. It shows the amount and purpose of the remittance and supports both your export claim under GST and your income records.

Some clients ask for tax paperwork. Form 10F is filed by non-residents who want treaty benefits in India, so it is normally not a form you file for your own export income. If a client needs proof that you are an Indian tax resident to apply a lower treaty withholding rate, you apply for a Tax Residency Certificate (Forms 10FA and 10FB under the old rules, Forms 42 and 43 under the Income-tax Rules, 2026).

If foreign tax is withheld, claim credit in India through Form 67 (now Form 44), supported by the client's certificate of tax withheld. As a resident, your worldwide income is taxable here.

Records to keep through the year

Good records turn the annual return into a few hours of work instead of a scramble. Presumptive filers still need an accurate figure for gross receipts, and every freelancer should match what clients have reported against the Annual Information Statement (AIS) and Form 26AS on the income tax portal before filing.

Review your position before 15 March each year: expected income, regime choice, advance tax paid and GST turnover. It is the last advance tax date of the year and the easiest point to correct a shortfall. Keep these records for every year:

• A numbered invoice for every client
• Statements for a bank account used only for work
• FIRC or FIRA for every foreign payment
• TDS certificates (Form 16A) from Indian clients
• Bills for equipment, software and other costs if you claim actual expenses