What Income Tax Returns a Freelancer Should File?

Many people choose to freelance a job because they wish to help a variety of organizations while remaining financially and personally independent. When an income tax return is the subject of discussion, however, it poses issues. Freelancers, unlike salaried workers, have multiple sources of income, and their returns should reflect that. When it comes to submitting income tax returns, salaried folks have it quite easy. Form16, as well as reminders and recommendations about tax filing deadlines and tax-saving requirements, are sent by the company’s HR department.

It’s a little more challenging for freelancers and consultants because they have several sources of income and frequently have multiple clients. Tax HelpDesk makes ITR filing in India so much easier for freelancers through their exceptional services. They’re one of the best online tax filing services in India. Let’s dive into the details in this blog.

Freelancer from a Tax Purview

Your income is classified as Profits & Gains of Business & Profession if you make money from an intellectual or manual skill. From a tax standpoint, you must consider yourself a businessperson. You have clients in the same manner that a business does, and you must pay taxes on the money you generate from various clients.

  • TDS is deducted from your payment

Section 194J of the Income Tax Act requires you to deduct 10% TDS (Tax Deducted from Source) from every professional service you provide. You, too, can get a TDS return, just like your salaried colleagues.

  • Claiming expenses reduces tax liability

You may be able to deduct expenses incurred while working to reduce your tax bill. This includes rent, repairs, depreciation, office expenses, travel expenses, and even meals, entertainment, and hospitality costs.

The ITR-4 form applies to you

The income tax form that freelancers and consultants must complete and submit is the ITR-3 or ITR-4. The ITR-3 is a tax form for reporting earnings from a business or profession. Starting in the 2017-18 fiscal year, professionals can choose presumptive taxation and reveal 50% of their gross receipts as income by filing ITR-4 (FY 2016-17).

For freelancers and independent consultants, Tax HelpDesk offers cheap price levels. They not only make ITR filing in India simple, but they also allow you to deduct their costs from your earnings and claim them as an expense.

How can you lower your tax bill?

There are some scenarios and areas where you can lower the amount of tax you pay. They’re all subject to deductions. If you have any additional expenses, you can add them to your deductions and minimize your tax liability. These are the costs:

  • Rent
  • Repairs
  • Depreciation
  • Office expenses
  • Meals
  • Entertainment
  • Hospitality
  • Traveling expenses
Requirements to File an Income Tax return as a freelancer

The ITR-4 form is used for ITR filing in India, as a freelancer. You can complete your ITR filing through Tax HelpDesk as it is one of the most reliable online tax filing services India but before that make sure you meet the following requirements:

  • Invoices for each freelance project for which you were compensated.
  • Your bank account statements
  • A statement detailing the amount of income tax paid.
  • PAN (Personal Identification Number) card

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