Archive · 27 Jul 2026
Presumptive Tax for Freelance Income
A salaried person with freelance income of ₹1 lakh in FY 2025-26 can opt for presumptive taxation under Section 44ADA if their freelance work qualifies as a specified profession.
This means 50% of the gross receipts will be deemed as taxable income, and expenses like phone and Wi-Fi bills cannot be claimed separately.
If opting for presumptive taxation, they should file ITR-4, provided they meet other conditions.
If not, they may need to file ITR-3.
There is a debate on whether presumptive taxation is beneficial when actual expenses are low, as it might be challenged.
A salaried individual with freelance income of ₹1 lakh in FY 2025-26 can opt for presumptive taxation under Section 44ADA if their work qualifies as a specified profession.
Presumptive taxation allows 50% of gross receipts to be deemed as taxable income, simplifying the tax filing process.
Expenses like phone and Wi-Fi bills cannot be claimed separately under presumptive taxation.
If opting for presumptive taxation, file ITR-4, provided other conditions are met; otherwise, file ITR-3.
There is a debate on the benefits of presumptive taxation when actual expenses are low, as it might be challenged.
- Who
- A salaried individual with freelance income
- What
- Eligibility for presumptive taxation under Section 44ADA
- When
- FY 2025-26
- Where
- India
- Why
- To simplify tax filing and reduce the hassle of claiming small expenses
Opting for Presumptive Taxation
Filing Regular Tax Returns
Convenience vs. Accuracy
Opting for Presumptive Taxation
Presumptive taxation simplifies the process by allowing 50% of gross receipts to be deemed as taxable income, reducing the hassle of claiming small expenses.
Filing Regular Tax Returns
Filing regular tax returns ensures accurate reporting of income and expenses, which may be beneficial if actual expenses are significantly higher than the presumptive income.
- Freelance Income
- ₹1 lakh
- Presumptive Tax Rate
- 50% of gross receipts
- ITR Form for Presumptive Tax
- ITR-4
- ITR Form for Regular Tax
- ITR-3
- Eligibility for Presumptive Tax
- Freelance work qualifies as a specified profession