Freelancers cannot claim the standard deduction of ₹50,000 available to a salaried individual. However, if you have worked a full-time job, you can claim the standard deduction for the salary income
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NEW DELHI :
Outbreak of covid-19 pandemic last year resulted in job losses across sectors. In the absence of a full-time job, many took up freelance gigs till they could land a job again.
Income tax rules vary greatly for freelancers and salaried professionals. So, for the purpose of filing your income tax return (ITR), what do you do when you have worked a full-time job and freelanced in a financial year?
We answer three important questions related to freelance income tax filing as you get ready to file your ITR.
Which form should I fill?
Freelancers can file their ITR only through either form 3 or form 4, whereas income from salary has to be reported in ITR-1 or ITR-2. In this case, precedence is given to freelance income and accordingly ITR form should be chosen.
“In ITR-1, one cannot disclose the freelance income. Even if there is ₹1 of freelance income, it has to filed in declared in ITR-3 or ITR-4," said Karan Batra, founder, charteredclub.com.