ITR 2025: Freelancers Earning Above ₹10–20 Lakh? Here’s What You Must Know About Taxes

Many independent professionals are unintentionally slipping into tax traps by neglecting important regulations like TDS, GST registration, and timely ITR filing, as freelancing is on the rise throughout India. Independent contractors run the danger of fines, interest, or even legal action from the Income Tax Department if they don't comply properly.

Why Freelancers Need to Know About TDS

• Frequently, while paying freelancers, clients withhold 10% as Tax Deducted at Source (TDS). The government receives this sum as a deposit under the freelancer's PAN.
• Always obtain Form 16A from customers in order to monitor the amount of tax withheld.
• Verify the deducted tax online against Form 26AS to make sure the data are correct.
• In your Income Tax Return (ITR), make a claim for the TDS that was withheld.

Do You Have to Register for GST?

• Yes, provided that you earn more than ₹20 lakh a year (₹10 lakh in certain states).
• Invoices from freelancers to Indian clients must include 18% GST.
• Services for overseas clients are considered exports and are exempt from GST, though registration can still be necessary.

How Freelancers File Their Taxes

• To file, use ITR-3 or ITR-4 forms.
• Without keeping thorough records, you might report 50% of your gross income as taxable under Section 44ADA (Presumptive Taxation).
• In order to claim deductions, keep track of expenses such as office rent, internet bills, and laptops.

What Takes Place If You Ignore Compliance?

If you don't register for GST or file an ITR, you risk:

• significant fines and interest on overdue taxes.
• legal notifications from the tax division.
• Loss of financial credibility, making it harder to get loans, credit cards, or government contracts.
• Paying taxes on time not only keeps you safe from legal trouble but also builds your professional reputation and financial history.