Freelancers must file ITR by August 31, choose correct form

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The August 31 deadline for filing income tax returns (ITR) for assessment year 2026-27 is approaching for freelancers, consultants, and self-employed professionals who are not subject to tax audit. Freelancers earning from foreign clients must report all income, including payments received in foreign currency, which is fully taxable for Indian residents. They can choose between ITR-4 under the presumptive taxation scheme (Section 44ADA) if their total income does not exceed ₹50 lakh, or ITR-3 if they maintain regular books of account or have incomes like capital gains exceeding ₹1.25 lakh.

Tax expert Pranav Sai S of ClearTax advises freelancers to estimate and pay advance tax if their total liability exceeds ₹10,000, as foreign clients typically do not deduct TDS. Supporting documents to keep include invoices, bank statements, Form 26AS, and for foreign income, proof of remittance (FiRC or e-FiRA), exchange rate calculations, and Form 67 if claiming foreign tax credit. Freelance income is taxed as business or professional income after deducting eligible expenses, with the applicable slab rate depending on the taxpayer's chosen regime.