ITR filing for freelancers: Form, foreign expenses, tax deductions, deadline — All FAQs answered

The August 31 ITR deadline is just days away, prompting many freelancers to wrap up their income tax return (ITR) filing process. Unlike salaried employees who receive a From 16 from one employer, freelancers often earn money from multiple clients and projects.

This makes the tax filing process slightly more complicated for freelancers, hence must choose the right ITR form, accurately report foreign expenses and claim eligible deductions. Here are some key questions answered to help freelancers complete their ITR filing correctly.

Any income generated through freelancing is treated as carrying on a profession or business under the Income-tax Act. The applicable tax return form depends on how they report their income in a financial year.

Taxpayers who are not required to get their accounts audited, must file their tax return within the due date to avoid penalties and other consequences.

Freelance income is generally taxable under the head “Profits and Gains of Business or Profession” (PGBP) of the income tax form. This applies to every individual with an independent profession, consultancy or business activity.

Such a taxpayer's net taxable income is calculated by deducting eligible business expenses from their total earnings. Other sources of income like rent, interest, dividends, or capital gains are taxed under their respective heads and added to the freelancer’s total income.

Unlike salaried individuals who can claim a standard deduction of up to ₹ 75,000 based on their chosen income tax regime, freelancers do not have that option.

Like salaried taxpayers, freelancers also have the benefit of deductions under the old tax regime for sections such as:

Some freelancers also work for foreign clients, providing services such as consulting, writing, design, IT development and digital marketing. Generally, they receive income for these services in foreign currency, which is fully taxable in India if the professional is a resident for tax purposes.

Foreign income should be first converted into INR and reported accurately, along with proper supporting records, said Pranav Sai S, tax expert at ClearTax.

If you have income from foreign clients , then advance tax also becomes applicable when the total tax liability for the year exceeds ₹ 10,000 after adjusting any tax deducted at source (TDS).

Since foreign clients generally do not deduct Indian TDS (tax deducted at source) from freelance payments, the freelancer is usually responsible for estimating and paying tax during the year, the tax expert said.

Eshita Gain is a digital journalist at Mint, where she joined in May 2025. She writes on corporate developments, personal finance, markets, and business trends, with a focus on delivering timely and relevant stories to a broad audience. <br><br> While her core beat lies in business and finance, she is not confined to a single niche and frequently explores stories across domains, including international relations and policy developments. <br><br> She holds a postgraduate diploma in business and financial journalism by Bloomberg from the Asian College of Journalism (ACJ), Chennai.