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Income Tax Return 2019: How Freelancers Can File ITR? Research Team | Posted On Monday, August 26,2019, 12:29 PM

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Income Tax Return 2019: How Freelancers Can File ITR?



With jobs being scarce these days, many people are taking up freelancing assignments. Freelancing is a lucrative option. But, unlike filing ITR for salaried people, filing income tax returns for a freelancer may be difficult.

A freelancer may have multiple sources of income. This is why he needs to pay attention to income tax filing. Is filing ITR difficult? We will help you there. You can now file Income Tax Returns absolutely free through You just need to click on the icon “FREE Income Tax Filing before 31st Aug”, and file your income taxes in just 5 minutes. If you are stuck while filing income tax returns, you would get a call offering help to complete the tax filing process.

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Income Tax Return 2019: How Freelancers Can File ITR?

What is Freelancing Income?

If you get hired to work on a specific assignment for a specific time, it’s a freelancing assignment. You get paid when the assignment is completed called freelancing income.

The income you get by displaying manual or intellectual skills is income from profession. This income is taxable as “Profits and Gains from Business or Profession.”

What is Gross Income?

The aggregate of all receipts you get when carrying out your profession is the gross income. Collect this information from the bank account statements if you receive professional income through banking channels.     

See Also: Documents Needed When Filing ITR   

Know Your Income Tax Slabs:

Income Tax Slabs for Individuals:

Income Tax Slabs For Senior Citizens:

Income Tax Slabs For Super Senior Citizens:

Claim Expenses and Reduce Tax Liabilities:

Freelancers are allowed to deduct expenses from income while doing the job. These are the expenses which can be claimed:

  • If you are taking a property on rent to carry out the work, the rent you pay can be deducted.
  • If you are paying for repairs on rented property, these repair costs may be deducted.
  • If you purchase a capital asset like a computer, it’s expected to last for a year or more. A small portion of its cost can be reduced from your income each year. The expense charged each year is called depreciation.

See Also: How To E-File ITR Form -1 In 2 Minutes?

How is Depreciation Calculated?

Let’s say you have bought a computer at Rs 60,000 for freelancing work. Let’s assume depreciation is calculated through the straight line method or SLM at 33.33% a year. Then, Rs 20,000 is charged as yearly expenses. Within the next 3 years the asset is considered to be fully depreciated.

TDS from Earnings:

Each and every professional service rendered attracts 10% Tax Deducted at Source or TDS. The person who pays the money deducts the TDS and deposits it with the Government. You can claim a tax refund for TDS just like salaried employees.

See Also: Avoid These Mistakes While Filing ITR

Add Income from Other Sources:

  • Earnings from house property.
  • Interest from saving account or FD if any.
  • Income from equity mutual funds and shares taxed under capital gains.
  • You may have earnings from employer if you are working part-time as a freelancer and also earn income from salary.

Important Tax Deductions You Can Avail:

  • You have the Section 80C deduction up to Rs 1.5 Lakhs a year on premiums paid for life insurance, home loan principal, investments in ELSS, 5 year tax saver FD, NSC, NPS, POTD and SSY among others. This is a collective deduction up to this limit.
  • There’s the Section 80D tax deduction on health insurance premium for self, spouse and kids up to Rs 25,000 a year. It’s Rs 50,000 a year for senior citizens.
  • Interest deduction on education loan up to any limits under Section 80E.
  • Some donations enjoy full or partial tax deduction under Section 80G.

See Also: How To File Income Tax Returns?

Select the Right ITR Form:

You may have to submit either ITR-3 or ITR-4 Form. ITR-3 Form is income from business or profession. Some professionals can choose presumptive taxation scheme and declare 50% of gross receipts as income in ITR-4 Form.

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