Filing ITR-4 for the first time is the moment most freelancers realise nobody actually taught them how to do this. The form has schedules with names like BP and CYLA, and one wrong entry can trigger a notice months later.
This is a walkthrough of the actual filing, not just the theory. What ITR-4 is for, which schedules you fill, where freelancers make mistakes, and what happens after you submit.
Who should file ITR-4
File ITR-4 (Sugam) if you are a freelancer or professional using Section 44ADA presumptive taxation and your gross receipts are under ₹75 lakh for the year. This covers the vast majority of Indian freelancers.
You should NOT file ITR-4 if you maintain regular books of accounts and claim actual expenses instead of the 44ADA presumption, if your gross receipts exceed ₹75 lakh, or if you have capital gains, foreign income, or more than one house property to report (these push you to ITR-3). For the underlying logic of 44ADA itself, see the guide on freelance tax in India simplified.
What you need before you start
Filing takes twenty minutes if you have these ready. It takes two frustrating hours if you do not.
- Form 26AS and AIS: Download both from the income tax e-filing portal. They show every TDS deduction and reported transaction against your PAN.
- Total gross receipts for the year: Every invoice you raised and got paid for, April to March. Not just what hit your bank; include TDS-deducted amounts at their full invoice value.
- Bank account details: Account number and IFSC for any refund.
- Advance tax challans: If you paid advance tax during the year, keep the challan numbers (CIN) handy.
- Investment proofs: 80C, 80D receipts if you are filing under the old regime and claiming deductions.
The schedules that actually matter
ITR-4 looks intimidating because of the schedule names. In practice, a presumptive-taxation freelancer only touches a handful.
Schedule BP is where your business really shows up. You enter your total gross receipts, the portal calculates 50% as deemed profit automatically, and that number flows into your total taxable income. This is the entire "business income" section for a presumptive filer. There is no line-by-line expense entry because 44ADA does not require it.
Schedule TDS pre-fills from your Form 26AS. Check every entry against your own invoice records. A common error is a client deducting TDS under the wrong section code, which can cause a mismatch that delays your refund.
Common mistakes that trigger a notice
Most notices to freelancers are not about wrongdoing. They are about mismatches the system flags automatically.
The most common one is reporting less income than your AIS shows. If a client paid you ₹80,000 and reported it, but you only declare ₹60,000 because that is what hit your bank after TDS, the system flags the gap immediately. Always report the gross invoice value, not the post-TDS amount.
Switching between 44ADA and regular books without justification is another trigger. If you used 44ADA last year and stop this year, the department may ask why. Keep it consistent unless your situation genuinely changed. Missing income from a second client entirely causes the same problem: every PAN-linked payment shows in your AIS, so if you forget a small client, the mismatch is automatic and easy for the system to catch.
And filing the wrong ITR form flags you fast. Freelancers who file ITR-1 by habit from a previous salaried job get flagged almost immediately, since ITR-1 does not support business income at all.
After you submit: e-verification and refunds
Filing is not complete until you e-verify, and an unverified return is treated as not filed at all. E-verify immediately using Aadhaar OTP, net banking, or a demat account login. Do this the same day you file. Do not wait.
If TDS deducted during the year exceeds your total tax liability, you get a refund. Refunds for straightforward 44ADA returns with no discrepancies typically process within 4 to 6 weeks of e-verification. If your Form 26AS and AIS matched cleanly before filing, there is usually nothing further to do.
If you are consistently paying more advance tax than needed because your income fluctuates, tracking your invoices as you go makes the following year's estimate far more accurate. This is also the same total you use when raising a professional freelance invoice, so keeping one clean record serves both purposes. Rinto keeps a running total of what you have invoiced and what clients have actually paid, so at any point in the year you can see your real income figure instead of estimating from memory.
Frequently Asked Questions
What is the difference between ITR-4 and ITR-3 for freelancers?
ITR-4 is for freelancers using Section 44ADA presumptive taxation, where 50% of gross receipts is deemed profit and no books of accounts are required. ITR-3 is for freelancers maintaining regular books of accounts and claiming actual expenses, or those with gross receipts above ₹75 lakh. Most solo freelancers with straightforward income should use ITR-4 because it is simpler and requires less documentation.
Do I need to report income that had TDS deducted at the gross or net amount?
Always report the gross invoice value, not the amount you actually received after TDS. If your invoice was ₹1,00,000 and the client deducted 10% TDS, you report ₹1,00,000 as income and claim the ₹10,000 TDS as a credit against your tax liability. Reporting only the net amount received is the single most common mismatch that triggers an automated notice.
What happens if my Form 26AS does not match what I actually earned?
Cross-check every entry against your own invoice records before filing. If a client deducted TDS but has not deposited it or filed their TDS return correctly, it may not show in your 26AS yet. Contact the client's accounts team to resolve it before filing, since claiming TDS credit that is not reflected in 26AS can delay your refund or trigger a query.
Can I switch from ITR-4 to ITR-3 in a later year?
Yes, but there are restrictions if you opt out of 44ADA after using it. If you have claimed 44ADA in a previous year and then report lower profit than 50% of receipts without maintaining proper books, you may be barred from using 44ADA again for five years. Only switch if your actual expense structure has genuinely changed, and ideally after consulting a CA.
How long do I have to e-verify my ITR-4 after filing?
You have 30 days from the date of filing to e-verify, but there is no reason to wait. E-verify immediately using Aadhaar OTP, net banking, or a demat account login right after you submit. An ITR that is filed but not e-verified within the window is treated as not filed at all, which can mean penalties and interest as if you missed the deadline entirely.