Freelancer income tax in India: presumptive tax, GST and advance tax

Two things changed the paperwork for freelancers in 2026 without changing the rules. The Income-tax Act, 2025 took effect on 1 April 2026, and the presumptive scheme for professionals, known for years as Section 44ADA, now sits in Section 58 of the new Act. The rate and the limits are the same. For income earned up to March 2026, returns are still filed under the Income-tax Act, 1961 and its section numbers.

Presumptive taxation for freelancers, in plain terms

Instead of recording every expense, you declare 50 percent of your gross receipts as your profit and pay tax on that. The other half is presumed to cover your costs, whatever your laptop, software and internet actually cost you. If you declare at least 50 percent, you do not need to maintain books of account or get a tax audit.

• It is for resident individuals, HUFs and partnership firms, but not LLPs.
• Your work must be a specified profession: legal, medical, engineering, architecture, accountancy, technical consultancy, interior decoration, or a notified profession such as information technology, film artists and company secretaries.
• Gross receipts must be up to ₹50 lakh, or up to ₹75 lakh if cash receipts are no more than 5 percent of the total.

If your work falls outside that list, as some design and writing work may, you may still be able to use the presumptive scheme for businesses, which taxes 6 percent of receipts received digitally. Where the line falls for your kind of work is worth confirming with a chartered accountant.

A worked example

Freelancers do not get the ₹75,000 standard deduction, which is only for salary. The rebate that makes income up to ₹12 lakh tax-free under the new regime does apply to resident individuals, so ₹12 lakh of receipts, presumed at ₹6 lakh of income, owes nothing.

Advance tax for freelancers

If your tax for the year after TDS is ₹10,000 or more, you owe advance tax. On the presumptive scheme you can pay the whole amount in one instalment by 15 March. Everyone else pays in four instalments, by 15 June, 15 September, 15 December and 15 March, and missing them costs interest. Advance tax in India walks through the dates and the interest.

TDS your clients deduct

Indian business clients often deduct TDS, commonly 10 percent on professional fees, before paying you. That tax is credited against your PAN. Check your Form 26AS and Annual Information Statement and claim every rupee of it when you file, or you will pay the same tax twice. Foreign clients do not deduct Indian TDS.

When GST registration applies

• Registration is mandatory once your aggregate turnover from services crosses ₹20 lakh in a financial year, or ₹10 lakh in the special category states.
• Services to clients abroad that qualify as exports are zero-rated. Once registered, you can export without paying GST by filing a letter of undertaking.
• Below the threshold, registration is optional. Some freelancers register anyway because business clients prefer it.

Which ITR form to file

If you use presumptive taxation and your total income is up to ₹50 lakh, ITR-4 is usually the simpler form. If you keep books and claim actual expenses, or have income that ITR-4 does not allow, you file ITR-3. Salaried people with freelance income on the side follow the same rule.