ITR-3 vs ITR-4: Choosing the Right Tax Form as a Freelancer

[nihalsari]

Freelancers often face confusion when choosing between the two main tax forms used for business income. Under the presumptive taxation scheme, freelancers with moderate income can file ITR-4, where the government assumes 50% of revenue as expenses—making tax filing simpler and reducing paperwork.

However, those with higher turnover or multiple income sources generally need to file ITR-3. This form allows taxpayers to claim actual business expenses such as internet costs, software subscriptions, and equipment depreciation, which can significantly lower taxable income when properly documented.

[cryptoenthusiast]

ITR-4 for moderate income = lifesaver. I was about to pull my hair out doing ITR-3 paperwork