How to file ITR as a freelancer | Fusion - WeRIndia

Every individual will have to file income tax returns (ITR) if their income exceeds the income tax exemption limit.

If you are working as a freelancer, then your income will be taxable under ‘Profits and Gains from Business or Profession’. You have to calculate all your receipts to get your gross income earned by way of your profession. Keep your bank account statement to check the income.

Freelancers can file either ITR 3 or ITR 4 on income from a business or a profession. However, certain professionals are allowed to choose the presumptive taxation scheme under section 44ADA while filing ITR-4. Those opting for this scheme should use ITR Form 4S. They can declare 50% of the gross receipts as income while filing their ITR if their income from a profession does not exceed ₹50 lakhs.

Freelancers can deduct expenses incurred to do the job from their gross income. Whether they have incurred travel expenses or office supplies, can be deducted from the income but the expenses must be related to their job.

Following expenses are allowed for a deduction:

• If you pay the rent to carry out your work and repairs incurred on a rental home, you can deduct them from your income.
• If you own a property to carry out your business and incur any expenses like repairs, you can deduct them.
• Repairs on your laptop, printer, or any other equipment are allowed for a deduction.
• Internet bills, telephone bills, office supplies, conveyance etc. are allowed.
• Travel expenses to meet your clients within or outside the countries are allowed.
• Entertainment, meal and hospitality expenses are also allowed for a deduction.
• Insurance and local taxes incurred for your business property.
• You can deduct domain registration expenses or apps purchases for your product.

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