Freelancers face crucial tax form decisions as deadline approaches

With the filing deadline looming, freelancers earning from various services must carefully select the correct income tax return form and maintain accurate records to avoid costly errors, according to experts.

Freelancers approaching the filing deadline need to treat income tax as more than a year-end formality. NDTV Profit notes that people earning from writing, design, consulting, tutoring, content creation, delivery work and similar services usually fall under business or professional income, not salary, which is why they do not receive Form 16 in the way salaried employees do.

The key decision is which return to file. For many freelancers, ITR-4 is the relevant form if they are using the presumptive taxation scheme and meet the income limits set out for that route. Guidance from other tax explainers cited here says freelancers may need ITR-3 instead if they keep full books of accounts, claim actual expenses or fall outside the presumptive framework. In short, the right form depends on the structure of the income and the method chosen to report it.

That choice matters because an incorrect return can trigger avoidable problems. Tax guides also warn that picking the wrong ITR form may lead to a defective return notice from the Income Tax Department. For that reason, freelancers are being advised to check whether their receipts fit the presumptive rules before filing, rather than assuming the same form used by salaried taxpayers will work for them.

Before submitting a return, freelancers should reconcile invoices, bank credits, Form 26AS, the Annual Information Statement and any tax deducted at source certificates. NDTV Profit says keeping those records aligned can reduce mistakes and make it easier to report income correctly under profits and gains of business or profession. For anyone relying on freelance earnings, the filing exercise is as much about documentation as it is about choosing the right form.