New Delhi: Freelancers and self-employed professionals filing income tax returns for the financial year 2025-26 need to ensure they select the correct Income Tax Return (ITR) form before the August 31, 2026 deadline. Unlike salaried employees, freelancers generally do not receive Form 16 because their earnings are usually treated as income from business or profession rather than salary.
Income earned from activities such as writing, designing, consulting, tutoring, content creation, professional services and other independent work is generally reported under the head Profits and Gains of Business or Profession. The appropriate ITR form depends on the nature of the freelancer’s income, eligibility for presumptive taxation and other sources of income.
For Assessment Year (AY) 2026-27, the Income Tax Department has specified August 31, 2026, as the due date for eligible taxpayers filing ITR-4, while taxpayers who need to file ITR-3 and whose accounts are not subject to tax audit also have the August 31 deadline.
With the deadline approaching, freelancers should check their income records, invoices, bank statements, Tax Deducted at Source (TDS) details and Annual Information Statement (AIS) before submitting their returns.
Which ITR form should freelancers choose?
For many freelancers, the key choice is between ITR-3 and ITR-4.
ITR-4, also known as Sugam, is available to eligible resident individuals, Hindu Undivided Families (HUFs) and firms other than Limited Liability Partnerships (LLPs) whose income is computed under the presumptive taxation provisions. The Income Tax Department says ITR-4 can be used where total income does not exceed Rs 50 lakh and the taxpayer has eligible business or professional income covered by the presumptive taxation provisions, including Section 44AD, 44ADA or 44AE, subject to the applicable conditions.
For a freelancer, Section 44ADA can be particularly relevant because it provides a presumptive taxation framework for certain specified professions. Instead of maintaining detailed books to determine actual business expenses in the usual manner, eligible taxpayers can declare income according to the presumptive provisions, subject to the conditions and limits applicable for the relevant year.
However, not every freelancer can simply choose ITR-4. Those who do not meet the eligibility requirements for the presumptive scheme or have income and circumstances that make them ineligible for ITR-4 may need to file ITR-3.
When ITR-4 can be useful
ITR-4 is designed to simplify tax filing for taxpayers who qualify for the presumptive taxation scheme.
Under this approach, eligible professionals can report income using the prescribed presumptive mechanism instead of calculating taxable professional income solely by maintaining detailed accounts of actual income and expenses.
For freelancers who satisfy all the conditions, this can make the return-filing process comparatively straightforward.
However, eligibility should be checked carefully. A freelancer should not select ITR-4 merely because their income comes from independent work. The taxpayer must meet the specific conditions prescribed for the form and the relevant presumptive taxation section.
The Income Tax Department’s guidance states that ITR-4 applies to eligible individuals, HUFs and firms other than LLPs with total income up to Rs 50 lakh and income from business or profession computed on a presumptive basis.
When freelancers may need ITR-3
ITR-3 is applicable to individuals and HUFs who have income from business or profession but are not eligible to file ITR-1, ITR-2 or ITR-4. It can therefore cover freelancers and professionals whose income or other circumstances do not fit within the eligibility conditions for ITR-4.
This distinction is important because freelancers can have significantly different financial situations.
For example, a person may have professional income along with other sources of income or may not qualify for presumptive taxation. In such cases, ITR-3 may be the applicable form.
Taxpayers should therefore determine their form based on their complete financial profile rather than simply choosing the form used by another freelancer.
The Income Tax Department specifically describes ITR-3 as the applicable return for individuals and HUFs with income under the heads including salary or pension, house property, profits or gains of business or profession, capital gains and income from other sources, where the taxpayer is not eligible for ITR-1, ITR-2 or ITR-4.
Freelancers generally do not get Form 16
One major difference between salaried employees and freelancers is the documentation they receive for their income.
A salaried employee generally receives Form 16 from the employer, providing details of salary income and tax deducted at source. Freelancers, however, generally do not receive Form 16 for their professional receipts because these payments are not treated as salary income.
This does not mean freelancers can file without maintaining income records.
Instead, they should maintain documents that establish the income received during the financial year. These can include invoices issued to clients, payment confirmations, bank statements and TDS certificates where applicable.
The records become particularly important when the freelancer receives payments from several clients or through different platforms.
Match invoices with bank records
Before filing the return, freelancers should reconcile their invoices and actual receipts.
NDTV Profit advises freelancers to check the invoices issued during the year against payments received and to verify the figures using bank statements. This can help identify missing receipts, duplicate entries or differences between billed and received amounts.
For example, an invoice raised in March may not have been paid until April. Simply adding all invoices without checking the applicable accounting and tax treatment could result in incorrect reporting.
Freelancers should therefore keep their records organised and understand which receipts belong to the relevant financial year.
Bank statements can also help identify payments that may have been overlooked during the preparation of the return.
Check AIS and Form 26AS
Freelancers should also compare their records with the Annual Information Statement (AIS) and Form 26AS before filing.
AIS contains information reported to the tax department from various sources, while Form 26AS provides tax-related information including details of tax deducted or collected at source, among other information.
Checking these records can help taxpayers identify differences between the income they have recorded and information available with the tax department.
TDS certificates should also be reviewed to ensure that tax already deducted on professional payments is correctly reflected in the return.
Any discrepancy should ideally be investigated before the return is submitted.
Keep professional records organised
Freelancers should not wait until the last few days before August 31 to gather their financial information.
Important records may include client invoices, bank statements, payment receipts, TDS certificates, Form 26AS, AIS and other accounting records maintained during the financial year.
Those maintaining books of accounts should also review them before filing. NDTV Profit notes that checking accounting records along with invoices, bank statements and tax statements can help freelancers avoid errors.
Proper record-keeping is particularly important for freelancers who work with several clients, receive international payments or have multiple streams of professional income.
August 31 is the key deadline for eligible non-audit filers
For AY 2026-27, the Income Tax Department’s official guidance lists August 31, 2026, as the due date for filing ITR-4. The same deadline applies to eligible non-audit taxpayers filing ITR-3.
This is different from the July 31 deadline that applies to several individual taxpayers filing forms such as ITR-1 and ITR-2.
Freelancers with business or professional income therefore need to determine which category they fall into instead of assuming that the July 31 deadline applies to them.
Where a taxpayer is required to get accounts audited, a different filing timeline applies. Taxpayers in such situations should check the applicable audit and return-filing deadlines rather than relying on the August 31 date.
Mistakes freelancers should avoid
One of the biggest mistakes is choosing an ITR form without checking eligibility.
A freelancer should first identify the nature of the professional activity, total income, other sources of income and whether the presumptive taxation provisions are applicable.
Another common problem is failing to reconcile professional receipts with bank statements and tax records.
Freelancers should also ensure that TDS credits are correctly reflected and that income reported in the return is consistent with available records.
Selecting the wrong form can create unnecessary complications, particularly where the taxpayer’s financial circumstances do not meet the conditions associated with the selected return.
What freelancers should do before filing
With August 31 approaching, freelancers can follow a basic checklist before submitting their returns:
- Identify whether ITR-3 or ITR-4 applies to their circumstances.
- Check whether they are eligible for presumptive taxation.
- Add up professional receipts for FY 2025-26.
- Match invoices with actual payments received.
- Review bank statements for professional receipts.
- Check Form 26AS and AIS.
- Verify TDS certificates and tax credits.
- Review books of accounts or other records, where maintained.
- Check all personal and other income sources before submitting the return.
- Complete the required verification after filing.
The correct form ultimately depends on the taxpayer’s individual circumstances, so freelancers with complex income profiles should consider obtaining professional tax advice before filing.
Freelancers should not wait until the last day
The August 31 deadline gives eligible freelancers additional time compared with the July 31 deadline applicable to several other individual taxpayers. However, choosing the right form and reconciling income records can take time, especially for people working with multiple clients.
The most important step is to distinguish between ITR-4 and ITR-3 based on eligibility rather than simply selecting the shorter or more convenient option.
Freelancers should also remember that professional income needs to be reported accurately and supported by appropriate records. Checking invoices, bank statements, AIS, Form 26AS and TDS details before filing can help reduce errors.
With August 31, 2026, approaching, freelancers should complete these checks well before the deadline rather than waiting until the final day.