Taxation & Compliance
Posted on Aug 25, 2025
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In India, the term freelancer is more than just a buzzword; it has a legal definition under the Income Tax Act. A freelancer is anyone who provides services or works independently for multiple clients, without being tied to one single employer. This includes professions like content writing, graphic design, consulting, marketing, and even new-age digital services like influencers or gig workers.
From a taxation perspective, the income tax department classifies the income of freelancers under the head “Profits and Gains of Business or Professions”. This means just like any other business, freelancers are required to report their income and pay taxes under this head.
ITR Filing for Freelancers
Freelancers are required to pay income tax based on the applicable tax slab rates. Depending on the applicable tax regime, freelancers can claim for eligible deductions. Freelancers also have the option to file taxes under the Presumptive Taxation Scheme (Section 44ADA of the Income Tax Act, 1961). Under this scheme, freelancers are required to pay only 50% of their total revenue receipts, considering the fact that their annual gross receipts do not exceed INR50 lakhs.
This threshold has been increased to INR75 lakhs if cash receipts account for not more than 5% of the total receipts.
For the financial year 2024-2025 (assessment year 2025-2026), the due date for filing income tax returns for freelancers is 31st July 2025.
Following is a table of income tax slab rates that apply to freelancers below 60 years of age for FY 2023-24:
Income Tax Slab rates for FY 2024-25- Old tax regime
Slabs | Individuals (Less than 60 years) | Resident Senior Citizens (>60 years but < 80 years) | Resident Super Senior Citizens (80 years and above) |
|---|---|---|---|
Upto Rs. 2,50,000 | Nil | Nil | Nil |
Rs. 2,50,000 to Rs. 3,00,000 | 5% | Nil | Nil |
Rs. 3,00,000 to Rs. 5,00,000 | 5% | 5% | Nil |
Rs. 5,00,000 to Rs. 10,00,000 | 20% | 20% | 20% |
Above Rs. 10,00,000 | 30% | 30% | 30% |
Rebate u/s 87A is applicable up to income of Rs 5 lakhs
New Tax Regime
Slabs | Rates of Tax |
Upto Rs. 3,00,000 | Nil |
From Rs. 3,00,000 to Rs. 7,00,000 | 5% |
From Rs. 7,00,000 to Rs. 10,00,000 | 10% |
From Rs. 10,00,000 to Rs. 12,00,000 | 15% |
From Rs. 12,00,000 to Rs. 15,00,000 | 20% |
Above Rs.15,00,000 | 30% |
Rebate u/s 87A is applicable up to income of Rs 5 lakhs.
Source: ClearTax
TDS for Freelancers
Any professional service you provide is liable for a 10% of Tax Deducted at Source (TDS) under Section 194J of the Income Tax Act. Just like a salaried professional, even freelancers are liable to pay a 10% TDS. Although a freelancer can claim the TDS just like other professionals. To know more about tax refunds, click here.
Advance Tax for Freelancers
For freelancers, if the total tax liability for the year exceeds INR10,000, they are required to pay advance tax. This is not limited only to the income from freelancing, but also includes income from other sources like interest, rent, etc.
The advance tax must be paid in four different instalments in a financial year:
1st Instalment- By June 15: 15% of the total estimated annual tax liability.
2nd Instalment- By September 15: 45% of the estimated tax liability. This should include the previous 15% that has already been paid.
3rd Instalment- By December 15: 75% of the estimated tax liability. This included previous payments as well.
4th Instalment- By March 15: 100% of the estimated tax liability.
Steps to Calculate Advance Tax for freelancers:
1.Add up total income: Add up your total freelancer income and other income for the year.
2.Arrive at taxable income: Deduct eligible expenses and other deductions (if any).
3.Calculate tax liability: Freelancers should check for the relevant tax slab and apply it.
4.Account for TDS: Subtract any TDS already deducted from the income.
5.Pay in instalments: Pay the balance tax as per the dates mentioned above.
Income Tax Filing Process for Freelancers
The following are the steps for freelancers to file income tax in India:
Step 1: Choose the applicable ITR form.
ITR-3: This form is for individuals and Hindu Undivided Family earning income from a proprietary business or profession.
ITR-4: This is for individuals, HUFs, and firms who are opting for the presumptive tax scheme under Section 44ADA.
Step 2: Collect all the necessary documents:
Bank account statements
Form 16A
Books of accounts
Invoices issued
Proof of investment
GST returns
Step 3: Calculate freelance total annual income.
Step 4: Apply presumptive taxation (if applicable)
If your annual receipts are up to INR50 lakhs, you may opt for presumptive taxation under section 44ADA.
Step 5: Register on the Income Tax e-Filing portal.
Step 6: Log in and select the applicable ITR form.
Step 7: Upload the completed form and verify your ITR submission.
Deductions Available for Freelancers
Now that you know the process for filing the ITR for freelancers, below are a few deductions available for freelancers:
Section | Exemption |
|---|---|
Section 80C | Exemption up to Rs. 1.5 lakhs on investment towards ELSS, ULIP, insurance, FDs, etc. |
Section 80CCD | Investment in central government schemes |
Section 80D | The premium for health insurance |
Section 80DD | Exemption up to Rs. 1.5 lakhs on treatment for disabilities |
Section 80CCF | Exemption of up to Rs. 20,000 on investment in government-notified infrastructure bonds. |
Section 80E | Education loan |
Source: Groww
Final Words
Filing your ITR as a freelancer in 2025 can feel like a daunting process of forms, codes, calculating ITR, and complicated compliance rules. While the whole process of filing ITR may seem complicated, getting paid should not be as complicated as filing ITR.
With Infinity, receiving international payments is fast, simple, and hassle-free. With Infinity, you get to receive international payments within 24 hours, which is the fastest in the market. You get to receive international payments in 50+ currencies across the globe by paying only 0.5% as a platform fee (inclusive of all) for each transaction.
So, what are you waiting for? Infinity helps you focus more on growing your freelance business while we take care of your financials.
FAQs
How does a freelancer match their TDS in returns?
Check Form 26AS before filing, ensuring all TDS is captured correctly.
Does a freelancer need to pay advance tax?
Yes, if the estimated tax liability exceeds INR10,000. It is usually paid quarterly.
Can a freelancer claim business expenses under presumptive tax?
No, actual expenses can not be claimed. But deductions under Chapter VI-A still apply.
