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Freelancer or Salaried

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Rajesh Sharma

N/A

23 Points Posted on 31 August 2025

Hi,

I am working as an independent contractor for a client, as a freelancer not of an employee; however I work for only one client, the payments are received on almost the same date every month. The services that need to be performed are decided by the client. There have no allowances and perks except the monthly payout.

While filing ITR, should form 1 be used (income from salary) or form 4 (income from profession with 44ADA)?

Thanks in advance.

Replies (4)

Quick Summary

This discussion clarifies the correct Income Tax Return (ITR) form for freelancers. If you're an independent contractor working for a single client, even with regular payments and client-dictated tasks, your income is classified as business/profession (PGBP), not salary. Therefore, ITR-4 with section 44ADA is generally appropriate for specified professionals with receipts up to ₹50 lakh (or ₹75 lakh with limited cash transactions), allowing presumptive income of 50%. If you wish to claim actual expenses, ITR-3 would be the correct form. ITR-1 is not suitable for freelancers.

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

121521 Points Posted on 31 August 2025

File ITR 4 ...

ITR 1 not eligible for freelancers...

Rahul Ingle

SEO Specialist - COVORO.ai

37 Points Posted on 01 September 2025

Use business/profession, not salary.
You’re an independent contractor, so income is PGBP, not salary.

Which ITR

ITR-4 + 44ADA if you’re a specified professional (e.g., technical/IT consultancy). Limits: receipts ≤ ₹50L, or up to ₹75L if cash ≤5%. Deem 50% as income. No separate expense claims.
ITR-3 if you want to claim actual expenses and keep books.

Checks

Salary applies only with TDS u/s 192 + Form 16. Freelancer payments are 194J/194C with Form 16A.
Report gross receipts, match AIS/26AS.
Consider GST if turnover crosses threshold (services usually ₹20L; lower in special-category states).
Pay advance tax if due.