ITR Filing FY26: How Can Freelancers File Their Returns in 2026?

The season for ITR filing in FY26 has started. The Income Tax Department has already notified the ITR-1 to ITR-5 forms for Assessment Year 2025-26. While salaried individuals usually find the process simple, freelancers and self-employed professionals need to take extra care while filing their returns.

Who is a Freelancer?

A freelancer is someone who works independently for multiple clients or companies, often on different assignments. This includes people such as content writers, consultants, software developers, designers, and more.

Freelancer Income Under the Tax Law

According to the Income Tax Act, 1961, income earned by freelancers is treated as “profits and gains from business or profession.” This means freelancers need to report their income like any other small business would.

Presumptive Taxation – Section 44ADA

Freelancers whose annual income does not exceed ₹50 lakh can choose the presumptive taxation scheme under Section 44ADA. Under this, 50% of the total income is considered profit and taxed accordingly. This reduces the need to maintain detailed accounts.

Deductions Freelancers Can Claim

Freelancers are eligible for various tax deductions just like salaried individuals:

• Section 80C: Deductions on life insurance premiums, home loan principal, ELSS investments, etc.

• Section 80D: Medical insurance premium payments.

• Section 80E: Interest paid on education loans.

• Section 80G: Donations to charitable trusts or relief funds.

These deductions are mainly available under the old tax regime. The new tax regime offers lower tax rates but fewer deductions.

ITR Filing FY26: Which Form to Use?

Freelancers need to choose between two forms:

• ITR-3: For those showing actual business or professional income with detailed expense tracking.

• ITR-4: For those opting for presumptive taxation under Section 44ADA.

Steps for ITR Filing in FY26 for Freelancers

1. Calculate your gross income for the full financial year (April to March).
2. Estimate your deductions and expenses under applicable sections.
3. Choose the correct ITR form—either ITR-3 or ITR-4.
4. File your return online through the Income Tax Department’s portal.

Conclusion

Filing income tax returns might seem confusing for freelancers at first, but with the right knowledge, it becomes manageable. Keeping records of all income and expenses, understanding the deductions, and selecting the correct tax regime and form are key to filing ITR smoothly. It’s also helpful to consult a tax expert if you’re unsure.

Read more on: ITR Filing FY24-25: Is Dearness Allowance (DA) Taxable?

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