ITR Filing: Which form do you need to fill as a freelancer or consultant? Know the process here
If you are a freelancer or a consultant who doesnt draw a salary at the end of every month and whose income is more than the basic exemption limit? In this case, you still need to file ITR before its deadline of July 31, but you will be required to use a different form.
The last date to file your income tax return for FY 2022-23 is July 31, 2023. It is advised not to miss the deadline as it can attract penalties and interest charges. All salaried employees and businesses must file ITR by using the applicable form if their income exceeds the basic exemption limit. But, what if you are a freelancer or a consultant who doesn’t draw a salary at the end of every month and whose income is more than the basic exemption limit? In this case, you still need to file ITR but you will be required to use a different form.
It must be noted that those who are mandated to get their accounts audited as per Section 44AB of the Income Tax have time till September 30 to file their income tax return.
Which forms are applicable for freelancers?
There are seven different ITR forms that the income tax department provides for the purpose of filing an income tax return. These are ITR-1, ITR-2, ITR-3, ITR-4, ITR-5, ITR-6, and ITR-7. Salaried employees can file ITR-1 (SAHAJ) using Form 16 or can use ITR-2 or ITR-3, depending upon the income source.
Freelancers, meanwhile, need to opt for ITR-3 or ITR-4 to file their income tax return. Such freelancers include social media influencers, consultants, bloggers, tutors, and content creators, among others.
Process to file ITR for freelancers
The income tax slabs are the same for a salaried person and a freelancer or consultant. But, a freelancer cannot claim the Rs 50,000 standard deduction available to a salaried individual. Freelancers can opt for Presumptive Taxation Scheme under Section 44ADA of the Income Tax Act, 1961. With this, they will be required to disclose only 50% of their gross revenue as income for taxation.
To calculate their taxable income, freelancers must determine their gross income for the respective financial year while considering the expenses and deductions. One has to visit the official Income Tax-e-filing portal, choose the appropriate ITR form (ITR-3 or ITR-4) and fill in all the required details to file the income tax return.
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.