CA Students with Freelance Projects: Do They Need to File ITR?

Chartered Accountancy (CA) students often take on freelance projects while pursuing their studies. These projects, whether advisory work, accounting assistance, or part-time consulting, generate income that may be subject to taxation under the Income Tax Act. Many students are unsure whether they are required to file an Income Tax Return (ITR) and which provisions apply to them. Filing an ITR not only ensures compliance but also helps build a clear financial record for future professional and academic purposes. Proper reporting of freelance income can prevent penalties, optimise tax liabilities, and provide access to benefits like claiming deductions under relevant sections of the Income Tax Act. Let's explore the nuances of filing ITR for CA students with freelance projects, covering eligibility, taxation methods, and practical filing tips.

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Table of Contents

• Do CA Students with Freelance Projects Need to File ITR?

• Understanding Freelance Income as per the Income Tax Act

• Choosing the Right ITR Form for CA Students

• Presumptive Taxation under Section 44ADA

• Claiming Expenses for Freelance Income

• Tax Deducted at Source (TDS) for Freelancers

• GST Compliance for CA Students

• Filing Timeline and Process for Freelancers

• Benefits of Using Platforms like TaxBuddy for Filing

• Common Mistakes CA Students Should Avoid

• Conclusion

• FAQs

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Do CA Students with Freelance Projects Need to File ITR?

CA students earning from freelance work are required to file an ITR if their total income exceeds the basic exemption limit, which is ₹3,00,000 for individuals below 60 years for FY 2024–25. Even if income is below the exemption limit, filing can be beneficial for claiming TDS refunds or maintaining a formal financial record. Freelance income is treated like business or professional income, and students must report it accurately to comply with the law.

Understanding Freelance Income as per Income Tax Act

Freelance income earned by CA students or professionals is treated as income from a profession under the Income Tax Act, 1961. This classification applies to all payments received for services rendered on a freelance basis, including consulting, part-time assignments, client projects, or any professional work offered independently. Unlike salary income, freelance income is not subject to Tax Deducted at Source (TDS) by default unless specified under contract terms, making it the responsibility of the individual to declare it accurately while filing their ITR.

All receipts, whether received via bank transfers, UPI, digital wallets, or cheque payments, are considered taxable. Even small payments for short-term projects must be recorded to ensure full compliance. Keeping detailed documentation such as invoices, receipts, contracts, and work orders is critical for verifying income during tax assessments and avoiding discrepancies.

Freelance income must be aggregated with other sources of income, such as interest income, rental income, or capital gains, to calculate the total taxable income for the financial year. Proper accounting and record-keeping help in claiming deductions like Section 80C investments, professional expenses, and other eligible allowances, which can reduce the overall tax liability.

By understanding the classification and obligations surrounding freelance earnings, CA students and freelancers can ensure accurate tax reporting, timely filing, and avoid potential penalties or notices from the Income Tax Department. Platforms like TaxBuddy can further simplify filing by automating income aggregation, expense tracking, and ITR submission for freelance professionals.

Choosing the Right ITR Form for CA Students

Chartered Accountancy (CA) students who earn freelance income from consultancy, tutoring, or part-time projects must carefully choose the correct Income Tax Return (ITR) form to ensure compliance and avoid scrutiny from the Income Tax Department. The choice of ITR form primarily depends on whether the student maintains detailed books of accounts or opts for presumptive taxation underSection 44ADA.

For students who prefer a simplified approach and meet the eligibility criteria for presumptive taxation, ITR 4 (Sugam) is the ideal choice. This form allows reporting income at a fixed percentage of gross receipts without maintaining detailed expense records. It is straightforward, reduces paperwork, and simplifies calculations.

On the other hand, students who maintain complete books of accounts, track all expenses, and want to claim specific deductions under various sections of the Income Tax Act should opt for ITR 3. This form is suitable for individuals with business or professional income who need to report detailed accounts, allowing them to claim legitimate deductions and offsets, which may reduce their tax liability. Selecting the correct ITR form ensures accurate reporting, smooth processing of returns, and minimizes the risk of queries or notices from the tax authorities.

Presumptive Taxation under Section 44ADA

Section 44ADA of the Income Tax Act offers a convenient option for professionals, including CA students, to declare their income under a simplified taxation scheme. Under this provision, 50% of the gross receipts from freelance projects is considered taxable income, while the remaining 50% is deemed to cover expenses. This eliminates the need to maintain detailed expense records, significantly reducing the compliance burden.

The scheme applies to professionals whose gross receipts do not exceed ₹50 lakh in a financial year. By opting for presumptive taxation, CA students can simplify their ITR preparation, calculate tax liability quickly, and avoid the complexities of detailed accounting. It also ensures full compliance with the Income Tax Act, as the declared income is considered final for tax purposes, reducing the likelihood of audits or scrutiny.

Overall, understanding the eligibility, benefits, and limitations of Section 44ADA empowers CA students to make informed decisions while filing their ITR, saving time and effort without compromising on compliance.

Claiming Expenses for Freelance Income

If not using presumptive taxation, students can claim legitimate business expenses to reduce taxable income. Expenses may include internet charges, software subscriptions, office supplies, and professional training costs directly related to freelance work. Accurate record-keeping with invoices and receipts is crucial. Proper expense reporting ensures students pay tax only on net income, minimising liabilities.

Tax Deducted at Source (TDS) for Freelancers

Clients may deduct TDS at 10% under Section 194J for professional fees exceeding ₹30,000 per annum. CA students must account for TDS in their ITR and can claim it as a credit against total tax liability. Keeping track of TDS certificates (Form 16A) ensures accurate tax calculation and avoids underreporting income or missing refunds.

GST Compliance for CA Students

Freelancers providing professional services may need to register for GST if annual income exceeds ₹20 lakh (₹10 lakh for special category states). GST registration is optional for small-scale students below this threshold, but voluntary registration can allow input tax credit claims. Proper GST invoicing ensures compliance with the Goods and Services Tax Act alongside income tax requirements.

Filing Timeline and Process for Freelancers

The ITR filing deadline for CA students earning freelance income is September 15, 2025, for FY 2024–25. Students should collate income records, TDS certificates, and eligible expenses before filing. Using the Income Tax Department’s e-filing portal or platforms like TaxBuddy simplifies the filing process, provides guidance on selecting the correct ITR form, and ensures timely submission.

Benefits of Using Platforms like TaxBuddy for Filing

Platforms like TaxBuddy help CA students file ITR efficiently, whether through self-filing or expert-assisted plans. TaxBuddy automates calculations, tracks TDS and expenses, ensures correct form selection, and minimises errors. It also provides timely reminders, a user-friendly interface, and secure handling of personal and financial data, saving students significant time and reducing compliance risks.

Common Mistakes CA Students Should Avoid

Filing Income Tax Returns (ITR) correctly is crucial for CA students, especially those earning income from multiple sources such as freelance work, internships, or part-time consulting. However, many students make avoidable errors that can lead to complications, delays in refunds, or even penalties. Here are some of the most common mistakes and how to avoid them:

1. Reporting Only Part of Freelance Income CA students often earn freelance income alongside their main academic or internship earnings. Reporting only a portion of this income can lead to discrepancies with the Income Tax Department, triggering notices or scrutiny. It’s essential to report the total freelance income accurately, including payments received via bank transfers, UPI, or digital wallets, to ensure compliance and avoid legal issues.

2. Missing TDS or Failing to Claim TDS Credit Many students assume that TDS (Tax Deducted at Source) is automatically credited and neglect to check their Form 26AS or Form 16A. Missing TDS or failing to claim it correctly can result in paying more tax than necessary. Always reconcile your TDS with the credited amount before filing to claim accurate refunds.

3. Choosing the Wrong ITR Form Selecting the incorrect ITR form is a common mistake, especially for students with multiple income sources. Freelance income, stipend, and scholarships may fall under different categories. Choosing the wrong form can lead to rejected returns, delayed refunds, or additional scrutiny. Review eligibility criteria carefully before selecting the form.

4. Ignoring Presumptive Taxation Options For students earning from small freelance projects or self-employment, opting for presumptive taxation under Section 44ADA can simplify filing and reduce taxable income. Ignoring these options may result in unnecessary tax payments and complex reporting requirements.

5. Delaying Filing Beyond Deadlines Late filing leads to penalties, interest, and delayed refunds. Even if income is low, filing on time ensures compliance and maintains a clean financial record, which is especially important for CA students starting their professional journey.

6. Improperly Documenting Expenses CA students often incur expenses for work-related software, online courses, or travel for projects. Failing to maintain proper documentation or receipts can prevent claiming deductions under relevant sections, reducing the tax benefits and potentially raising queries during scrutiny.

Conclusion

Filing an ITR is essential for CA students with freelance income. Proper reporting of income, claiming deductions, and complying with TDS and GST requirements ensures smooth financial management. For anyone looking for assistance in tax filing, I highly recommend you download the TaxBuddy mobile app for a simplified, secure, and hassle-free experience.

FAQs

Q1. Does TaxBuddy offer both self-filing and expert-assisted plans for ITR filing, or only expert-assisted options? A. TaxBuddy provides flexibility by offering both self-filing and expert-assisted plans. Users comfortable with digital platforms can choose the self-filing option, which guides them step-by-step to complete their ITR accurately. For those who prefer professional help, the expert-assisted plan connects users with experienced tax professionals who handle filing, verification, and troubleshooting, ensuring error-free compliance.

Q2. Which is the best site to file ITR? A. While there are multiple platforms for ITR filing, TaxBuddy stands out for its secure and user-friendly interface. It combines AI-driven guidance with real-time support, enabling taxpayers to file accurately, claim all eligible deductions, and avoid common mistakes. The seamless workflow ensures that both beginners and professionals can file returns efficiently.

Q3. Where to file an income tax return? A. Income Tax Returns can be filed directly through the official Income Tax Department e-filing portal, or via trusted platforms like TaxBuddy. Platforms like TaxBuddy simplify the process by pre-filling data fromForm 16, tracking TDS credits, and providing error-checking mechanisms, making filing faster and more reliable.

Q4. Can CA students use presumptive taxation under Section 44ADA? A. Yes. If a CA student provides freelance or professional services and their gross receipts do not exceed ₹50 lakh, they can opt for the presumptive taxation scheme under Section 44ADA. This allows reporting 50% of gross receipts as taxable income, simplifying compliance and reducing record-keeping.

Q5. Are freelance expenses deductible? A. Yes. For students or professionals not opting for presumptive taxation, expenses directly related to their freelance work—such as software, internet, office supplies, and professional subscriptions—can be claimed as deductions. Proper documentation is essential to validate these expenses during filing.

Q6. Is TDS applicable on freelance income for CA students? A. Yes. Clients paying a CA student for freelance services may deduct TDS at 10% under Section 194J if the payment exceeds ₹30,000 in a financial year. It is crucial to track these TDS credits while filing ITR to avoid discrepancies and ensure proper tax credit.

Q7. What documents are required for ITR filing? A. Essential documents include:

• Income proofs: Form 16, bank statements, or freelance invoices.

• TDS certificates: Form 16A or Form 26AS.

• Expense proofs: Bills or receipts for deductible expenses.

• GST invoices: If registered under GST.

These documents ensure accurate reporting and help avoid notices from the Income Tax Department.

Q8. What if a CA student misses the ITR deadline? A. If the original or extended ITR filing deadline is missed, a belated return can still be filed by December 31, 2025. However, a penalty under Section 234F may apply, depending on the delay and income level. Filing promptly, even after the deadline, ensures continued compliance and prevents legal complications.

Q9. Is GST mandatory for all CA students? A. GST registration is required only if the annual turnover from professional services exceeds ₹20 lakh (₹10 lakh for special category states). Freelance CA students below this threshold do not need GST registration, but they must maintain proper invoices for income reporting.

Q10. How does TaxBuddy simplify TDS credit claims? A. TaxBuddy automatically tracks all TDS certificates and reflects them in the user’s profile. While filing ITR, the platform applies TDS credits against total tax liability, reducing manual reconciliation errors and ensuring accurate refunds. This is especially helpful for freelancers or students with multiple clients.

Q11. Can freelance income affect scholarships or student loans? A. Yes. Reporting freelance income ensures transparency in financial records. Taxable income from freelancing may impact eligibility for scholarships or affect the assessment of student loans, as financial institutions consider total income for loan sanction or aid calculations. Proper filing avoids future disputes.

Q12. Is mobile-based filing safe for CA students? A. Absolutely. TaxBuddy’s mobile app uses secure encryption and provides guided filing. Users can safely upload documents, verify TDS credits, and file returns on the go. The app ensures a seamless, error-free experience while keeping personal and financial data secure at all times.