ITR filing guide for freelancers, creators and gig workers for FY 2025-26
As India’s freelance and creator economy expands, many gig workers are navigating tax filing without formal employment backing. With the ITR filing deadline extended to September 15, 2025, tax experts urge this segment to understand their obligations and choose correct forms.
Which ITR Form Applies?
- ITR-4 (Sugam): For those using the presumptive taxation scheme under Section 44ADA, especially if receipts are under ₹3 crore with limited cash transactions. 50% of income is considered taxable profit.
- ITR-3: For professionals with higher receipts, or those wanting to deduct actual expenses. Mandatory if maintaining books of accounts.
How Freelancers Are Classified
There’s no legal term for “freelancer” or “gig worker” in the Income Tax Act, but income is recognised under “business” or “profession”, depending on the nature of work.
What Deductions Can Be Claimed?
- Eligible expenses include laptops, internet bills, travel, software, and other tools used for work.
- Under Section 44ADA, individual deductions are disallowed; 50% of total income is considered taxable.
Essential Records to Maintain
Freelancers must keep:
- Invoices and receipts for work or tools.
- Contracts or emails from clients.
- Bank statements, screenshots of payments.
- Travel bills (if work-related).
- Expense logs in notebooks or spreadsheets.
Proper documentation supports deduction claims during assessments.
Expert Advice
Freelancers should start early, choose the correct ITR form based on income and tax method, and keep clear records. Failing to comply can lead to missed deductions or tax notices.
Tip
Filing early helps avoid last-minute issues and gives more time to correct errors, especially for those handling their taxes without a CA.
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