DIY Filing for Freelancers: How TaxBuddy Supports Multiple Income Heads

Freelancers in India often earn income from multiple sources, which makestax filing more complex than for salaried individuals. Freelance income may include professional fees, project payments, rental income, capital gains, or international earnings, each categorized under different heads of income by the Income Tax Department. Understanding these multiple heads is essential for accurate reporting, avoiding penalties, and optimizing tax liability. Proper documentation, tracking, and awareness of eligible deductions are crucial. Freelancers need to keep detailed records of all income and expenses to ensure compliance, especially when working with multiple clients and platforms. With growing digitalisation and pre-filled forms offered by tools like TaxBuddy, freelancers can now manage their tax filings efficiently while minimizing errors. This guide explains how freelancers can handle their taxes seamlessly, maximize deductions, and comply with regulations for FY 2024-25.

---

Table of Contents

• How TaxBuddy Automates Pre-Filled ITRs & Data Aggregation

• Expense Tracking and Deduction Guidance for Freelancers

• Handling Capital Gains, Rental Income, and International Earnings

• GST Compliance for Freelancers Through TaxBuddy

• Expert Assistance and Notice Management

• Secure Document Vault and Mobile-First Filing Experience

• Tips for Error-Free DIY Filing for Freelancers

• Comparing Old vs New Tax Regimes for Freelancers

• Common Filing Mistakes to Avoid

• Conclusion

• FAQs

---

How TaxBuddy Automates Pre-Filled ITRs & Data Aggregation

TaxBuddy offers a streamlined and automated approach to handling pre-filled Income Tax Returns (ITRs) and data aggregation, which is especially beneficial for freelancers who often juggle multiple income sources. The platform automatically collects and consolidates income information from various sources, including Form 26AS, bank statements, and TDS records from employers or clients. This automatic aggregation ensures that all income is accurately captured, reducing the need for manual data entry and minimising the chances of errors that could trigger notices from the Income Tax Department.

Once the data is aggregated, TaxBuddy generates pre-filled ITR forms tailored to the individual taxpayer. Freelancers can then review the pre-filled details, verify the information, and make any necessary adjustments, ensuring the filing is fully accurate and compliant with current tax regulations. Additionally, the platform automatically categorises different types of income, deductions, and exemptions, allowing users to clearly see how each component affects their overall tax liability. This automation not only saves significant time but also simplifies the complex process of tax filing for freelancers, making it more efficient and less prone to mistakes.

Expense Tracking and Deduction Guidance for Freelancers

Freelancers often incur business-related expenses such as software subscriptions, internet bills, office supplies, and travel costs. TaxBuddy provides tools to track these expenses throughout the year, highlighting eligible deductions under Section 37 and Section 80C provisions. This guidance helps freelancers reduce taxable income legally while avoiding errors in claiming deductions.

Handling Capital Gains, Rental Income, and International Earnings

Freelancers may also earn from capital gains, rental income, or overseas projects. TaxBuddy assists in categorizing such income correctly under the relevant head, ensuring proper reporting and accurate computation of taxes. The platform also accounts for foreign tax credits where applicable, avoiding double taxation for international earnings.

GST Compliance for Freelancers Through TaxBuddy

For freelancers registered under GST, TaxBuddy provides guidance on invoicing, GST returns, and input tax credit claims. It ensures timely filings, tracks due dates, and helps maintain compliance with GST regulations. Automated reminders and pre-filled forms make GST management simpler for freelancers.

Expert Assistance and Notice Management

TaxBuddy offers expert-assisted filing options for freelancers who need professional help. It also manages income tax notices, discrepancies, or queries from the Income Tax Department. Experts review the filing and provide guidance on responses, reducing the risk of penalties or interest charges.

Secure Document Vault and Mobile-First Filing Experience

TaxBuddy provides a secure and organized platform for storing all your financial documents, including invoices, receipts, salary slips, bank statements, and investment proofs. With the secure document vault feature, freelancers, self-employed professionals, and salaried individuals can safely upload and store these records in a centralized digital space. This eliminates the risk of losing important paperwork and ensures that all records are readily available whenever needed for filing ITR or responding to notices from the Income Tax Department.

The mobile-first interface further enhances convenience by allowing users to access their stored documents from anywhere, whether at home, in the office, or while traveling. This flexibility enables seamless tax filing on the go, without the need for carrying physical documents or spending time organizing them manually. Additionally, having all documents digitally organized simplifies record-keeping for audits, reconciliations, and TDS verification, helping freelancers and professionals maintain accurate and up-to-date financial information effortlessly. By streamlining the document management process, TaxBuddy significantly reduces stress and time spent on filing taxes.

Tips for Error-FreeDIY Filing for Freelancers

Freelancers who choose to file their Income Tax Returns (ITR) on their own can take several practical steps to ensure a smooth, accurate, and error-free filing process. First, it is essential to account for all sources of income, including payments received from clients, platform-based earnings, and any other freelance work. Missing even a single income entry can lead to mismatches with the Income Tax Department records, potentially triggering notices or delays in processing.

Next, verifying Tax Deducted at Source (TDS) credits is crucial. Freelancers should reconcile their TDS details with Form 26AS or other statements to ensure that all tax deducted by clients or platforms is correctly reflected in the system. This helps prevent errors in tax computation and avoids unnecessary corrections later.

Claiming all eligible business and professional expenses is another key step. Expenses like internet bills, software subscriptions, hardware purchases, travel costs, and office rent can reduce taxable income if properly documented. Freelancers should maintain receipts and invoices to support these claims.

Finally, cross-checking all data against pre-filled forms provided by the Income Tax Department is important to catch discrepancies before submission. Platforms like TaxBuddy assist by providing intelligent prompts, validation checks, and error alerts to minimize mistakes and delays. Using such tools helps freelancers complete their filing accurately, ensuring compliance while saving time and effort.

Comparing Old vs New Tax Regimes for Freelancers

Freelancers in India have the flexibility to choose between two tax regimes: the old tax regime, which allows for multiple exemptions and deductions, and the new tax regime, which offers lower tax slab rates but with minimal exemptions. The old regime can be beneficial for freelancers who have significant deductible expenses, such as investments under Section 80C, health insurance premiums under Section 80D, or home loan interest underSection 24(b). These deductions help reduce taxable income, potentially resulting in lower tax liability.

On the other hand, the new tax regime is designed to simplify taxation by offering lower slab rates and removing the need to claim multiple deductions. While it may not provide the same scope for exemptions, it can be advantageous for freelancers with fewer deductible expenses or those seeking a straightforward filing process without tracking various deductions.

Platforms like TaxBuddy provide tools that allow freelancers to simulate their tax liability under both regimes. By entering income and eligible expenses, TaxBuddy calculates the tax payable under each regime, highlighting potential savings. This comparison empowers freelancers to make an informed decision, choosing the tax regime that maximizes benefits while aligning with their financial planning.

Common Filing Mistakes to Avoid

Freelancers frequently encounter challenges when filing their Income Tax Returns (ITR), which can lead to errors, penalties, or delays in refunds. One of the most common mistakes is underreporting income. Many freelancers receive payments through multiple channels—bank transfers, digital wallets, or direct client payments—and sometimes fail to include all sources in their ITR. This can trigger notices from the Income Tax Department and result in interest or penalties.

Another frequent issue is missing TDS entries. Tax Deducted at Source (TDS) is often reflected in Form 26AS, but freelancers may overlook small deductions made by clients or platforms. Filing without reconciling these TDS amounts can lead to mismatches, delayed refunds, or additional scrutiny.

Additionally, claiming non-eligible expenses is a common problem. Freelancers sometimes attempt to deduct personal expenses or unsupported costs, which can lead to disallowance during assessment.

Late filing is another critical mistake. Submitting ITR after the deadline can attract penalties, interest on outstanding taxes, and delayed refunds.

Platforms like TaxBuddy play a key role in preventing these errors. Their system automatically identifies inconsistencies, missing TDS, or ineligible claims before submission, ensuring accurate and timely filing. Using such tools allows freelancers to review all entries carefully, submit error-free returns, avoid penalties, and secure faster refunds.

Conclusion

Freelancers managing multiple streams of income face unique tax filing challenges, but platforms like TaxBuddy simplify the process. With automated pre-filled forms, expense tracking, GST support, and expert assistance, freelancers can file accurate returns efficiently. For anyone looking to streamline freelance tax filing, it is highly recommended to download the TaxBuddy mobile app for a secure, seamless, and hassle-free experience.

FAQs

Q1. Does TaxBuddy offer both self-filing and expert-assisted plans for freelancers?

Yes, TaxBuddy provides flexible options for freelancers. Those who prefer to manage their taxes independently can use the self-filing plan, which offers guided prompts, pre-filled forms, and error checks. For freelancers who want professional help, the expert-assisted plan connects them with tax specialists who review the ITR, suggest deductions, ensure compliance, and handle any complex scenarios, making the filing process stress-free and accurate.

Q2. Can TaxBuddy handle GST filings for freelancers?

Yes, TaxBuddy tracks all GST obligations for registered freelancers, including input tax credit, sales and purchase invoices, and monthly or quarterly returns. The platform automatically calculates the GST payable, flags any pending filings, and generates ready-to-submit GST returns, simplifying compliance and reducing the risk of penalties for missed deadlines.

Q3. How does TaxBuddy manage international earnings?

Freelancers earning from clients abroad can rely on TaxBuddy to categorize foreign income correctly under ‘Income from Other Sources’ or ‘Business/Professional Income’. It also calculates applicable foreign tax credits, ensuring that double taxation is avoided. The platform provides a clear summary of income in INR and helps report it accurately in the ITR.

Q4. Is expense tracking automated in TaxBuddy?

Yes, TaxBuddy allows freelancers to upload receipts, invoices, and expense proofs throughout the year. The system automatically tracks eligible business expenses, organizes them by category, and calculates deductions under Section 80C, 80D, and other relevant sections. This automation ensures accuracy, saves time, and helps optimize tax liability.

Q5. Can freelancers compare old and new tax regimes using TaxBuddy?

Absolutely. TaxBuddy provides a tax simulation tool that calculates tax under both the old and new regimes. Freelancers can see potential savings, evaluate deductions, and make an informed decision about which regime suits their income and expenses best. This comparison helps in strategic tax planning without guesswork.

Q6. How secure is TaxBuddy’s document vault?

Security is a top priority. TaxBuddy encrypts all uploaded documents and stores them in a secure cloud vault, accessible only to the user via mobile or desktop. This ensures that sensitive financial information such as Form 16, invoices, and bank statements remain confidential and protected from unauthorized access.

Q7. Can TaxBuddy help with income tax notices?

Yes, freelancers using expert-assisted plans receive guidance if the Income Tax Department issues a notice. TaxBuddy’s tax specialists help review the notice, identify discrepancies, prepare responses, and submit corrections. This ensures compliance while minimizing stress and avoiding potential penalties.

Q8. Does TaxBuddy support capital gains reporting for freelancers?

Yes, the platform allows accurate reporting of short-termandlong-term capital gains from stocks, mutual funds, or property. It automatically categorizes gains under the appropriate head of income, calculates tax liability, and includes it in the ITR, ensuring full compliance with Income Tax rules.

Q9. Are TDS credits automatically verified in TaxBuddy?

Yes. TaxBuddy cross-checks TDS entries against Form 26AS and highlights mismatches before filing. This feature prevents common errors where TDS is incorrectly credited or missing, helping freelancers avoid unnecessary notices or refund delays.

Q10. Can freelancers file ITR directly via TaxBuddy mobile app?

Yes. The TaxBuddy mobile app offers a complete ITR filing experience optimized for freelancers. Users can upload documents, fill forms, verify details, and submit their ITR without needing a desktop. The app provides step-by-step guidance, notifications, and error checks for a smooth, hassle-free process.

Q11. How does TaxBuddy prevent common filing errors?

TaxBuddy includes built-in error-checking tools that validate pre-filled data, suggest corrections, and highlight missing information. It ensures that income, deductions, and TDS credits are correctly captured, minimizing the risk of mistakes that could trigger notices or delays in refunds.

Q12. Is the mobile-first interface user-friendly for freelancers?

Yes. TaxBuddy’s mobile-first design ensures freelancers can manage taxes on the go. From uploading receipts to filing ITR, all functions are accessible through an intuitive interface. Push notifications, prompts, and a dashboard summary make it convenient to stay compliant and organized, even without prior tax expertise.