Your Freelance Income, Tax-Smart & Compliant

If you opt for Section 44ADA (presumptive taxation) and gross receipts are below ₹75 lakh, file ITR-4 (Sugam). This is the simplest option. If your receipts exceed ₹75 lakh, you opt out of 44ADA, or you have capital gains / multiple business heads, file ITR-3. TaxClue will assess your situation and file the correct form.

GST registration is mandatory if your annual service turnover exceeds ₹20 lakh (₹10 lakh in some states). However, you must register regardless of turnover if you provide export services (OIDAR category) or serve GST-registered businesses who want to claim input tax credit. Voluntarily registering also lets you claim GST ITC on your own purchases (laptop, software subscriptions, etc.).

Under Section 44ADA (presumptive), no separate deductions are allowed — the 50% deemed profit already accounts for all expenses. Under regular accounts (ITR-3), you can claim actual expenses: home office rent proportion, laptop/equipment depreciation (15–40%), internet bills, professional subscriptions, travel, and professional development courses — all must be documented with invoices.

When a company pays a freelancer/consultant professional fees exceeding ₹30,000 in a year, it must deduct TDS at 10% under Section 194J before payment. This deducted amount is deposited with the government and reflects in your Form 26AS and AIS. When you file your ITR, this TDS is credited against your tax liability — if excess was deducted, you get a refund. Always verify your Form 26AS matches your actual income.

If your total tax liability exceeds ₹10,000 after TDS credit and you don't pay advance tax, you'll be charged interest under Section 234B (1% per month for unpaid advance tax) and 234C (1% per month for each delayed instalment). These charges are applied when you file your ITR and can significantly increase your total tax outgo. TaxClue helps you calculate and pay the correct advance tax on time.