Can I Report Freelance Income Under Section 44ADA in the Same ITR?
If you’re a salaried employee who also earns money through freelance projects or consulting work, you must appropriately report both income sources on your Income Tax Return (ITR). The positive aspect is that you may include freelance income under Section 44ADA on the same ITR if you use an appropriate return form and meet the criteria for eligibility.
Section 44ADA offers a simplified presumptive taxation scheme for professionals such as software developers, designers, consultants, and IT freelancers. If your gross receipts from freelance or professional services do not exceed ₹50 lakh in a financial year, you can declare 50% of the income as taxable, and the rest is presumed as expenses; no detailed books of accounts are required.
To report both salary and freelance income, you must file ITR-3. This form allows you to declare:
- Salary income (from your employment)
- Professional income (under Section 44ADA)
- Capital gains, interest income, and other sources, if applicable
ITR-4, designed for presumptive taxpayers, cannot be used if you have a regular salary, foreign assets, capital gains, or income above the ₹50 lakh threshold under presumptive rules.
When filing under Section 44ADA:
- You don’t need to maintain detailed profit & loss or balance sheets
- Advance tax must be paid if the total tax liability exceeds ₹10,000
- You can still claim deductions under Section 80C, 80D, etc.
At Patron Accounting, we assist salaried professionals, part-time freelancers, and consultants in properly structuring their income, claiming legitimate deductions, and remaining compliant under mixed income guidelines. Whether you work full-time and freelance on the side, or you run a solo consulting business, we make sure your return is correct and audit-proof.
