Income Tax Return filing AY 2025-26: Which ITR form should freelancers and gig workers use? Explained

Income Tax Return (ITR) e-filing FY 2024-25: ITR filing may be relatively straightforward for salaried individuals, but what about gig workers and those who earn through freelancing? With the rise of freelance and gig-based income, many individuals are unsure how to report such earnings correctly.

The ITR filing for FY 2024-25 (AY 2025-26) has been partially thrown open on the Income Tax Portal incometax.gov.in. Individuals who have to file their tax returns using ITR-1 or ITR-4 forms can now do so. So which ITR form should gig workers and free lancers use to file their ITR for FY 2024-25?

ITR e-filing FY 2024-25: Which Form For Gig Workers?

As non-traditional work arrangements grow, understanding the appropriate tax filing requirements is essential for freelancers and gig workers to remain compliant and minimize potential issues.

According to Amarpal Chadha, Tax Partner, EY India, income from independent work—such as writing, design, consulting, tuition, or platform-based gigs like ride-sharing and food delivery—is treated as “Profits and Gains from Business or Profession” under Indian tax law.

Importantly, ITR-1 and ITR-2 do not apply to income from freelancing or gig work. Selecting the correct form is crucial for smooth return processing and to avoid errors or compliance notices.

• Freelancers maintaining books of accounts and claiming actual business expenses should file ITR-3.
• Alternatively, those in specified professions—such as legal, accounting, or technical consultancy etc—with gross receipts up to Rs 50 lakh (or Rs 75 lakh if cash receipts do not exceed 5% of the total gross receipts) may opt for ITR-4 under the presumptive taxation scheme. Under the presumptive taxation scheme, 50% of gross receipts are deemed taxable, simplifying compliance by eliminating the need for detailed bookkeeping.

Amarpal Chadha tells TOI that ITR-4 cannot be filed if the taxpayer has incomes like short-term capital gains, long-term capital gains u/s 112A exceeding Rs 1.25 lakh, income from and reporting of foreign assets, etc.

"If an individual who is a freelancer or gig worker has capital gains referred above, they will have to file ITR - 3. Ideally, ITR -3 isto be used for business income. However, ITR-4 is an option if your income in under certain limits to make the return process simpler. If those conditions are not met, they will have to stick to ITR-3," he says.

Also Read | Income Tax Return: Are capital gains from MFs taxed differently under new & old regime? What taxpayers should know about new LTCG, STCG rules

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