The August 31 deadline for filing income-tax returns is getting closer. For freelancers, content creators and others earning income from a business or profession, this is the time to get their numbers, expenses and documents in order.
Taxpayers whose business or professional income does not require a tax audit generally have to file their ITR by August 31. This can include freelancers and content creators, depending on the nature of their work and their tax position.
But filing the return before the deadline is only one part of the job. Incorrect income classification, unsupported expenses or using the wrong tax scheme could put your return under the tax department’s scanner.
Here are five areas freelancers and creators should check carefully before filing their FY 2025-26 ITR.
— consulting assignments, freelance projects, brand collaborations, content creation and other professional work.
The first step is to understand how this income should be classified for tax purposes. Treating professional or business income incorrectly can affect the ITR form, bookkeeping requirements and other tax compliances.
Gaurav Makhijani, Tax Head at Makhijani Gera and Associates, said, “For freelancers and creators, the first thing to get right is how their income is classified for tax purposes.”
He added that income from consulting, freelance professional services, content creation or brand collaborations may need to be reported as business or professional income.
This classification is important because it can have a knock-on effect on several other compliance requirements.
This is another area where freelancers and creators need to tread carefully.
Working from home or using a personal car for work does not mean every household or travel expense can be claimed as a deduction. Expenses should have a genuine connection with earning the income and should be backed by proper records.
For instance, a creator who travels for both personal and professional reasons cannot automatically claim the entire travel cost as a business expense.
Makhijani said taxpayers “should claim only those expenses that are genuinely related to earning the income and can be supported with proper records.”
If an expense serves both personal and professional purposes, only the reasonable business-related portion should be considered.
The presumptive taxation scheme under Section 44ADA can make tax filing simpler for eligible professionals. But being a freelancer does not automatically make someone eligible to use it.
The nature of the activity and other conditions need to be checked before opting for the scheme.
Makhijani explained that “being a freelancer does not automatically mean that a person can use 44ADA.”
For example, if a person earns Rs 40 lakh from an activity that does not qualify as a specified profession under Section 44ADA, they cannot simply declare Rs 20 lakh, or 50% of their receipts, as taxable income under the scheme.
This is why freelancers should first establish whether their work falls within the specified professional categories and whether the other conditions are met.
Income-tax and GST are separate areas of compliance, and filing an ITR does not automatically take care of GST obligations.
Depending on the nature and value of their services, freelancers and creators may need to register under GST once the applicable turnover conditions are met.
Creators working with overseas clients or platforms also need to pay attention to the rules governing exports of services.
“GST requirements should be looked at separately,” Makhijani said. “Just because a person is filing an income-tax return does not mean GST compliance can be ignored.”
For those earning from foreign clients, transactions may also need to be examined from an export-of-services perspective.
Another mistake is assuming that filing an ITR is the only compliance requirement.
Depending on their income, turnover and the nature of their work, some taxpayers may have to maintain books of account or get their accounts audited under the income-tax law.
This makes it important to check the applicable requirements before filing rather than waiting until the last minute.
Makhijani said freelancers and creators “should not look at ITR filing in isolation” because their income, expenses, GST, books and audit requirements all need to be considered together.
For freelancers and content creators, tax filing can be more complicated than simply adding up bank credits and submitting a return. Income from different platforms, brand deals, consulting assignments and other sources needs to be properly accounted for.
Before filing, taxpayers should check their income classification, keep invoices and expense records ready, verify whether Section 44ADA applies to them and review their GST, bookkeeping and audit obligations.
With the August 31 deadline approaching, getting these details right now can help avoid unnecessary tax complications later.