You have a salaried job and a few freelance clients on the side. Your employer deducts tax from your salary, your clients may deduct TDS from your fees, and now you are not sure which ITR form to file, whether you owe advance tax, or whether your employment contract allows any of this. Searching it up gives you conflicting answers, because some tax sites say you must switch to ITR-3 and others say ITR-4 still works.
If you earn a salary and freelance income, you can often still file ITR-4, as long as you stay within its limits. Here is how to check, what to do about advance tax, and what to look at in your employment contract before you take clients.
You can often file ITR-4 with salary and freelance income together
The income tax portal's own page for ITR-4 (Sugam) lists salary or pension income as allowed alongside business or profession income computed under the presumptive schemes, which includes Section 44ADA for professionals. The conditions on that page are that your total income is not above ₹50 lakh, you have no more than two house properties, your agricultural income is no more than ₹5,000, and your long-term capital gains under Section 112A are no more than ₹1.25 lakh (Income Tax Department, ITR-4 help). Some websites claim salary plus 44ADA income forces you into ITR-3, but the official page does not say that.
The same page lists who cannot use ITR-4: directors in a company, anyone who held unlisted equity shares during the year, anyone with short-term capital gains, non-residents and residents not ordinarily resident, anyone above the ₹50 lakh income limit, and anyone with lottery or racehorse income or income taxed under Sections 115BBDA or 115BBE. If any of these applies to you, ITR-3 is the fallback. Before you file, read the current ITR-4 instructions for the full eligibility list.
Presumptive tax still applies to the freelance part
Under Section 44ADA, a professional's taxable profit is taken as 50 percent of gross receipts, for receipts up to ₹50 lakh, or up to ₹75 lakh where cash receipts are no more than 5 percent of the total (Section 44ADA). A cheque that is not an account payee cheque counts as cash for that test. The scheme is open to resident individuals and partnership firms in the notified professions, so check that your kind of work is on the list. The guides on how freelance income is taxed in India and filing ITR-4 as a freelancer cover the scheme and the form in detail.
You may see the presumptive scheme under a different section number in commentary on the Income-tax Act, 2025, which took effect on 1 April 2026. The ITR-4 page for AY 2026-27 on the portal still refers to Sections 44AD, 44ADA and 44AE, so those are the names that apply to the return for FY 2025-26 that you file now. Advance tax you pay now is for FY 2026-27, which falls under the new Act, so confirm the current section numbers on the portal.
Check advance tax, because your salary TDS may not cover the freelance income
Under the 1961 Act, advance tax is payable when the tax due for the year is ₹10,000 or more (Section 208), and tax commentary reports the same trigger in the Income-tax Act, 2025, which governs advance tax for the current year. Tax your employer deducts from your salary and tax your clients deduct as TDS are normally taken into account, but your salary TDS is set for your salary, not for the extra income, so a freelance side income can leave a tax bill that nobody has deducted. Confirm your figure with a CA or the portal's calculator rather than assuming the TDS is enough.
Under the 1961 Act, professionals taxed under Section 44ADA can pay the whole advance tax in a single instalment by 15 March (Section 211), and commentary reports that this carries over to the current year. If you also have salary income, ask your CA how your combined advance tax is treated before you rely on that single date. The guide on setting aside tax every month as a freelancer shows a simple habit that avoids a large bill in March.
Claim TDS credit as it appears in your tax statements
When a client deducts TDS, you claim credit for it in your return as it shows in your Form 26AS and your Annual Information Statement, so check both before you file. If a client's deduction is missing, ask them to correct their TDS return. The guide on what to do when a client's Form 16A is missing walks through that situation.
Read your employment contract and ask before you start
Whether you may freelance depends on your own employment contract and company policy, so read both before you take a client. Look for clauses on outside work, conflict of interest, confidentiality and the use of company equipment, and if the wording is unclear, ask HR and get any permission in writing. This post does not cover what a court would enforce, because that depends on your contract and your state, and the position on side work is not settled in a way that fits one answer for everyone.
If you are weighing a full switch rather than a side income, the guide on freelancing versus a full-time job compares the real income, and the guide on how to start freelancing in India covers getting your first clients. For the GST side, see when a freelancer must register for GST.
Seeing what the side income really pays you
Rinto lets you track time per task and see your real hourly rate per project, so you can see what your side clients pay for the hours you give them after your day job. That number tells you whether the side income is worth the evenings and weekends it takes. This post is general information, not tax or legal advice, so confirm your own position with a CA.
Frequently Asked Questions
Which ITR form should I file if I have salary and freelance income?
Many people with salary and freelance income under the presumptive scheme can file ITR-4, which the income tax portal's ITR-4 page lists as allowing salary alongside Section 44ADA income. The conditions include total income of ₹50 lakh or less, no more than two house properties, and long-term gains under Section 112A of no more than ₹1.25 lakh. Directors in companies, holders of unlisted equity shares and people with short-term capital gains cannot use ITR-4. If you fall outside those limits, ITR-3 is the fallback.
Do I have to pay advance tax if I have a salary and freelance income?
Advance tax is payable when your tax for the year is ₹10,000 or more, and the test applies to the tax you still owe after allowing for tax already deducted at source. Your employer's TDS on salary is set for your salary, so freelance income can leave a tax bill nobody has deducted. Professionals taxed under Section 44ADA can pay the whole amount in one instalment by 15 March, but check with a CA how that works when you also have salary income. Working out your figure early avoids a large payment and possible interest.
Will TDS from my clients and my employer both count toward my tax?
You claim credit for TDS in your return as it appears in your Form 26AS and your Annual Information Statement. Check both before filing, because credit appears only after the person who deducted the tax has reported it against your PAN. If a client's deduction is missing, ask them to correct their TDS return. Your salary slips and Form 16 show the tax your employer deducted, and Form 26AS shows what each client deducted, so match all of them against your return.
Do I need to tell my employer about my freelance work?
Check your employment contract and company policy before you take a client. Look for clauses on outside work, conflict of interest, confidentiality and use of company equipment, and ask HR if anything is unclear. Get any permission in writing, since a written yes protects you if a manager later questions your outside work. What a court would enforce depends on your contract and your state, so a general article cannot settle it for you. Ask before you start, not after a client has paid.
What stops a salaried freelancer from using ITR-4?
Being a director in a company, holding unlisted equity shares during the year, having short-term capital gains, being a non-resident or resident not ordinarily resident, earning above ₹50 lakh in total, having more than two house properties, or having lottery or racehorse income all rule out ITR-4, as does income taxed under Sections 115BBDA or 115BBE. Long-term gains under Section 112A above ₹1.25 lakh also do. In those cases ITR-3 applies. Read the current instructions for the full eligibility list.