1 week ago
Seven Freelancer Tax Filing Mistakes Before August 31 Deadline
Freelancers and professionals filing their tax returns for FY 2025-26 must use the correct form.
ITR-4 is not available to everyone with freelance or professional income.
Some people must use ITR-3, especially if they have capital gains, certain foreign assets or other disqualifying circumstances.
Presumptive taxation can make filing easier, but it is available only for certain activities and within receipt limits.
Taxpayers should compare this method with their actual expenses before choosing it.
They should also check whether their income and tax deducted match their own records.
If AIS or Form 26AS contains an error, they should report the correct information and use the portal’s feedback facility.
After submitting the return, they still need to verify it, check refund bank details and monitor processing.
Freelancers must choose ITR-3 or ITR-4 based on eligibility conditions, not convenience.
Presumptive taxation depends on the taxpayer’s profession, receipts, payment channels and actual expenses.
Eligible professionals generally face a ₹50 lakh receipt limit, rising to ₹75 lakh when at least 95% of receipts are digital or banking-based.
Declaring income below the prescribed presumptive rate can trigger an audit requirement under applicable provisions.
Taxpayers should reconcile invoices, books, AIS and Form 26AS rather than blindly changing income to match reported data.
- Who
- Freelancers and professionals filing income-tax returns for FY 2025-26.
- What
- Guidance on seven mistakes to avoid when choosing an ITR form, using presumptive taxation, reconciling records and completing filing.
- Where
- Through the income-tax return and related online tax-reporting portals.
- When
- For FY 2025-26 returns, before the August 31, 2026 deadline; returns must be e-verified within the prescribed 30-day period after filing.
- Why
- To avoid using an ineligible form, miscalculating taxable income, losing TDS credit or leaving the filing incomplete.
Key facts
- Relevant year
- Financial year 2025-26
- Deadline
- August 31, 2026
- Presumptive receipt limit
- ₹50 lakh for eligible professionals
- Higher receipt limit
- ₹75 lakh when at least 95% of receipts are through banking or digital channels
- ITR-4 restrictions
- The form is unavailable in circumstances including certain capital gains, foreign assets or income, unlisted equity shares, company directorship, agricultural income above ₹5,000, receipts above ₹75 lakh and non-resident or RNOR status.
- TDS reconciliation
- Mismatches with AIS or Form 26AS may result from incorrect PAN reporting, reimbursements, timing differences or missing TDS filings.
- Post-filing checks
- Taxpayers should e-verify the return, pre-validate a refund bank account, monitor status and review the processing intimation.
Quotes
Parag Jain
Tax Head at 1 Finance and the tax adviser cited in the article
“If the AIS entry is wrong, use the feedback facility on the portal and submit the correct position,”
livemint.com
“One that catches people most often is capital gains,”
livemint.com
Sources
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