# Freelancer Tax in India FY 2026-27: 44ADA, TDS, ITR > How freelancers are taxed in India for FY 2026-27: the 50% presumptive scheme, its limits, client TDS, advance tax by 15 March, GST and the ITR form. Source: https://trykosh.com/learn/freelancer-tax-guide-india Guide - Freelancers # Freelancer tax in India: a complete guide for FY 2026-27 Freelancers in India can be taxed on half of what they bill, without keeping full books, if they qualify for the presumptive scheme. Here is who qualifies, how the numbers work, what to do about TDS and advance tax, and when the scheme isn't the right choice. Updated 25 October 20266 min readBy the Kosh team On this page[How freelance income is taxed](#how-taxed)[The presumptive scheme for professionals](#presumptive)[Worked examples](#worked-examples)[When the scheme isn't the best choice](#when-not)[TDS from Indian clients](#tds)[Advance tax, GST and filing](#advance-gst-filing)[Records to keep anyway](#records)[FAQs](#faq) ## How freelance income is taxed Freelance income is "profits and gains of business or profession", not salary. You're taxed on profit: receipts minus expenses. There are two ways to work out that profit. - **Regular books:** record every receipt and expense, claim actual costs and depreciation, and file ITR-3. Above certain limits, a tax audit is needed. - **Presumptive taxation:** declare a fixed share of your receipts as profit, skip detailed books, and file ITR-4. For professionals this is the scheme long known as **section 44ADA**, which the Income-tax Act, 2025 has folded, with 44AD and 44AE, into **section 58**. Most people still call it 44ADA. Either way, profit is added to any other income and taxed at your slab rate, in the new regime by default or the old one if you opt out. ## The presumptive scheme for professionals Presumptive taxation for professionals (old 44ADA, now section 58), FY 2026-27 Rule Detail Who Resident individuals, HUFs and partnership firms (not LLPs) in a specified profession Professions Legal, medical, engineering, architecture, accountancy, technical consultancy, interior decoration, film artists, company secretaries, information technology and other notified professions Deemed profit 50% of gross receipts, or more if you choose to declare more Receipts limit INR 50 lakh, or INR 75 lakh if cash receipts are 5% or less of the total Expenses Not claimed separately: the 50% covers all of them, including depreciation Books Not required beyond basic records Advance tax All of it by 15 March Return ITR-4 (Sugam) for income up to INR 50 lakh without complications; ITR-3 otherwise If your work isn't on the list, for example some kinds of content writing, design or online selling, you may fall under the business version instead (the old 44AD: 6% of digital receipts and 8% of cash, up to INR 2 crore or INR 3 crore). Check carefully, or ask a CA, before you file. The [presumptive tax calculator](/tools/presumptive-tax-calculator) covers that scheme. ## Worked examples ### INR 36 lakh of receipts, Indian clients Devika is a software consultant who billed INR 36 lakh in FY 2026-27. Her real expenses (laptop, software, coworking, travel) are about INR 4 lakh. Clients deducted INR 1,50,000 of TDS. Under the presumptive scheme her taxable income is half her receipts, **INR 18 lakh**, and her tax in the new regime is **INR 1,66,400**. After TDS she owes INR 16,400, due as advance tax by 15 March 2027. Taxed on her actual profit of INR 32 lakh, she'd pay INR 5,61,600. The scheme saves her INR 3,95,200 and the cost of keeping full books. In the old regime with INR 1.5 lakh of 80C, her tax would be INR 3,19,800, because as a non-salaried person she gets no standard deduction and the old slabs are steeper. The [freelancer tax calculator](/tools/freelancer-tax-calculator) runs all three. ### INR 24 lakh of receipts: no tax at all At INR 24 lakh of receipts, deemed profit is INR 12 lakh. In the new regime the 87A rebate cancels the tax, so a resident freelancer with no other income pays **INR 0**. Any TDS clients deducted comes back as a refund when you file. ### INR 60 lakh, all from clients abroad Above INR 50 lakh, the scheme needs cash receipts at 5% or less, which is easy when every rupee arrives by bank transfer. At INR 60 lakh, deemed profit is INR 30 lakh and tax is **INR 4,99,200**. Foreign clients deduct no Indian TDS, so all of it is advance tax. [Free tool**Freelancer tax calculator (44ADA)**Freelancers and consultants can pay tax on half their gross receipts without keeping detailed books. See what that means for you in FY 2026-27, how it compares with your real profit, and what's left after TDS.](/tools/freelancer-tax-calculator)[Free tool**Presumptive tax calculator (44AD)**Small traders and businesses can skip detailed books and pay tax on a fixed share of turnover. This calculator works out that deemed profit and the tax on it under both regimes for FY 2026-27.](/tools/presumptive-tax-calculator)[Free tool**Advance tax calculator**Split this year's tax into the four advance-tax instalments, net of TDS, so you pay on time and avoid interest.](/tools/advance-tax-calculator)[Free tool**Freelance rate calculator**Work backwards from the income you want to the rate you need to charge. The calculator adds your business costs, a buffer for lean months and income tax, then divides by the hours you can actually bill.](/tools/freelance-hourly-rate-calculator)[Free tool**GST invoice generator**Make a clean tax invoice in your browser: fill in your details and your buyer's, add up to ten items, and print it or save it as a PDF. Nothing is uploaded; the invoice is built on your device.](/tools/gst-invoice-generator) ## When the scheme isn't the best choice - **Expenses above half your receipts.** If you rent a studio, employ assistants or buy expensive equipment, your real profit may be below 50%. You can declare the lower profit, but then you must keep books, and if your income exceeds the basic exemption limit, get a tax audit. - **Receipts above the limit.** Past INR 50 lakh (or INR 75 lakh with low cash), the scheme isn't available. - **You want to claim losses.** Presumptive income can't create a loss to carry forward. ### Salaried with freelance work on the side You can have both. Salary is taxed as salary, with its standard deduction and employer TDS, and freelance receipts can use the presumptive scheme separately. Two things change: your employer's TDS doesn't cover the freelance income, so you'll likely owe advance tax by 15 March, and you'll file ITR-4 or ITR-3 instead of ITR-1. Freelance receipts also count toward the INR 12 lakh rebate line, so a small side income can create tax on your salary too. ## TDS from Indian clients Indian businesses paying you professional fees deduct TDS (long known as section 194J) once their payments to you cross the yearly threshold: **10%** for professional services, **2%** for technical services. That TDS is credited against your tax. Three things to do with it: 1. **Check AIS or Form 26AS every quarter.** Every client's TDS should appear against your PAN. If it doesn't, ask the client to correct their TDS return. 2. **Invoice on the gross amount.** Your receipts are the full fee, not what reached your account after TDS. 3. **Claim refunds.** If your tax is lower than the TDS (as in the INR 24 lakh example), file to get it back. If TDS is consistently far above your real tax, you can apply for a lower-deduction certificate. ## Advance tax, GST and filing - **Advance tax:** under the presumptive scheme, the whole year's tax (minus TDS) is due by **15 March**. Miss it and interest runs at 1% a month. With regular books, you pay in four instalments from June. See the [advance tax guide](/learn/advance-tax-guide). - **Regime choice:** freelancers can leave the new regime by filing the required form before the due date, but people with business income can switch back only once. Compare carefully; with no standard deduction, the new regime usually wins. - **GST:** registration is needed once aggregate turnover crosses INR 20 lakh in a year (INR 10 lakh in special-category states), and exports count toward it. Exports of services are zero-rated under a LUT. See [GST for freelancers](/learn/gst-for-freelancers). - **Filing:** after the Finance Act 2026, the due date for non-audit business and professional returns in ITR-3 or ITR-4 is **31 August**; audit cases have until 31 October. Check the notified dates on the [income-tax portal](https://www.incometax.gov.in/). The Income-tax Act, 2025 brings new form names and numbers, so use the form the portal offers for the year. ## Records to keep anyway Even without full books, keep every invoice, your bank statements, client TDS certificates, foreign inward remittance advices for overseas payments, and receipts for large purchases. They answer most questions the department may ask, and they're what you need if you ever leave the scheme. **Where Kosh fits** Kosh reads your bank statements, separates client receipts from transfers, tracks receipts against the INR 20 lakh GST line and the presumptive limits, and reminds you before 15 March. ## Frequently asked questions How much tax does a freelancer pay in India? Under the presumptive scheme, tax is charged on half your gross receipts at slab rates. In the new regime, receipts up to INR 24 lakh mean deemed income of INR 12 lakh or less, which is tax-free for residents after the 87A rebate. On INR 36 lakh of receipts the tax is INR 1,66,400. What is section 44ADA called under the new Income-tax Act? The presumptive schemes, including 44ADA for professionals, 44AD for businesses and 44AE for goods carriages, are combined in section 58 of the Income-tax Act, 2025. The rules for professionals are the same: 50% deemed profit and receipts up to INR 50 lakh, or INR 75 lakh with low cash receipts. Can a freelancer claim expenses under 44ADA? No. The 50% deemed profit is treated as being after all expenses and depreciation. If your actual expenses are more than half your receipts, you can declare your real profit instead, but you'll need books and, above the basic exemption, a tax audit. Which ITR form should a freelancer file? ITR-4 if you use the presumptive scheme and your total income is up to INR 50 lakh without complications such as larger capital gains. Otherwise ITR-3. The new Act brings new form names, so follow the portal for the year. The due date for non-audit cases is 31 August. Do freelancers have to pay advance tax? Yes, if the tax left after TDS is INR 10,000 or more. Under the presumptive scheme it can all be paid by 15 March. Freelancers with foreign clients often owe advance tax on all their income because no Indian TDS is deducted. What TDS do clients deduct from freelancers? Indian businesses usually deduct 10% on professional fees and 2% on fees for technical services once their payments to you cross the yearly threshold. The TDS is credited against your tax when you file, and any excess is refunded. ## Sources - [Income Tax Department](https://www.incometax.gov.in/) Written by the Kosh team and checked against the rules in force on 25 October 2026. This guide is general information, not tax, legal or investment advice. Kosh is an educational financial planning tool by Primedepth Labs. It is not a SEBI-registered investment adviser and does not offer personalised investment advice, hold your money or execute trades. Markets carry risk; read scheme documents carefully and consult a registered adviser before acting. ## Upload your statement and Kosh does this for you. 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