How to File ITR for Salary + Freelance Income Using TaxBuddy
- Rajesh Kumar Kar
- Sep 2
- 9 min read
Filing an Income Tax Return (ITR) can seem overwhelming, especially when managing multiple sources of income such as salary and freelance earnings. For FY 2024-25, accurate reporting, timely filing, and proper documentation are essential to avoid penalties and delays in refunds. Understanding the correct procedures, forms, and deductions can make the process smooth and efficient. This guide provides a detailed step-by-step approach for salaried professionals who also earn freelance income, covering key aspects like calculating total income, claiming deductions, reporting TDS, and filing using modern tools like TaxBuddy for a seamless experience.
Table of Contents
Step 1: Gather Your Documents
The first step in filing an accurate ITR is to collect all necessary documents. This includes Form 16 from your employer, freelance invoices, bank statements, interest certificates, proof of investments under Section 80C, insurance premium receipts under 80D, and donation receipts under 80G. Keeping these documents organized reduces errors during filing and ensures you claim all eligible deductions.
Step 2: Choose the Correct ITR Form
For taxpayers with both salary and freelance income, the appropriate ITR forms are usually ITR 1 (if freelance income is under presumptive taxation) or ITR 4 (for business/professional income under Section 44ADA). Selecting the correct form is crucial to avoid mistakes and ensure smooth processing of refunds.
Step 3: Calculate Your Total Income
Combine income from salary and freelance work to determine your total taxable income. Salary income includes basic pay, allowances, and perquisites, while freelance income may be reported under the presumptive taxation scheme (up to 50% of total receipts) or as actual profits and losses. Accurate calculation ensures correct tax liability.
Step 4: Fill Out the ITR Form
Enter all income details, deductions, and TDS information in the chosen ITR form. Ensure that freelance income is correctly reported in the appropriate section. Double-check PAN numbers, TDS amounts, and investment details. Filing errors can lead to notices or delays in refunds.
Step 5: Calculate Tax and Pay Dues
After entering income and deductions, calculate tax liability. If there is a shortfall after accounting for TDS, pay advance tax or self-assessment tax before filing. TaxBuddy’s automated tools can calculate taxes precisely, helping avoid underpayment or penalties.
Step 6: File and Verify Your Return
Submit the ITR either online via the e-filing portal or using JSON upload utilities. After filing, verify your return through Aadhaar OTP, net banking, or the physical ITR-Vprocess. Verification is mandatory for the return to be considered valid.
Why Use TaxBuddy for Filing ITR with Salary + Freelance Income?
Filing Income Tax Returns (ITR) when you have multiple sources of income, such as a salaried job and freelance work, can be complex. It involves correctly reporting salary income, accounting for Tax Deducted at Source (TDS), calculating taxable freelance income, and claiming eligible deductions. TaxBuddy simplifies this process by automatically importing your salary details from Form 16 and TDS statements, reducing manual errors and saving time.
For freelance income, TaxBuddy helps ensure accurate reporting, calculates the tax liability based on your total income, and considers the correct slab rates under the Income Tax Act. Its AI-driven interface guides users through claiming all eligible deductions, exemptions, and tax-saving investments. The platform offers both self-filing and expert-assisted options, allowing taxpayers to choose based on their comfort level. Filing through TaxBuddy’s mobile app further ensures a smooth, secure, and stress-free experience, with real-time updates and error-checks to prevent common mistakes.
Understanding Presumptive Taxation for Freelancers
For freelancers and small professionals, maintaining detailed accounts can be cumbersome. Section 44ADA of the Income Tax Act provides relief through presumptive taxation. Under this scheme, freelancers can declare 50% of their total receipts as taxable income, while the remaining 50% is considered expenses, even without maintaining exhaustive books of accounts. This simplifies compliance while ensuring correct taxation.
TaxBuddy makes reporting presumptive income seamless by automatically calculating the taxable portion based on total receipts and verifyingTDS records to prevent mismatches. It helps freelancers accurately declare income, claim eligible deductions like Section 80C or 80D, and ensures that freelance income and salary income are combined correctly to compute total tax liability. By using TaxBuddy, freelancers can avoid errors in presumptive income reporting, minimize scrutiny from the Income Tax Department, and save time while staying fully compliant.
Claiming Deductions: 80C, 80D, 80G, and Others
Taxpayers have the option to reduce their taxable income by claiming deductions under various sections of the Income Tax Act. Section 80C allows deductions on investments such as Public Provident Fund (PPF), Employee Provident Fund (EPF), Equity-Linked Saving Schemes (ELSS), life insurance premiums, principal repayment on home loans, and tuition fees for children. Section 80D provides deductions on health insurance premiums for self, spouse, children, and parents, which is crucial for managing medical expenses while reducing tax liability. Section 80G covers donations made to specified charitable institutions, which can be claimed either fully or partially depending on the organization.
For individuals with both salary and freelance income, understanding the applicability of these deductions is critical. Salary earners can claim standard deductions along with 80C/80D benefits, while freelancers may claim eligible deductions related to business expenses and specified investments. Platforms like TaxBuddy simplify this process by automatically identifying eligible deductions, ensuring maximum tax savings and reducing the chances of errors during filing.
How to Report TDS for Salary and Freelance Work
Tax Deducted at Source (TDS) is a key component of accurate tax reporting. For salaried individuals, TDS is reflected in Form 16, which is provided by the employer and details total salary, deductions claimed, and taxes deducted during the financial year. Freelancers, on the other hand, may have TDS deducted by clients, and these entries appear in Form 26AS. Proper reporting of both salary and freelance TDS is essential to avoid mismatches with the Income Tax Department, which can delay refunds or trigger scrutiny.
Accurate reporting involves cross-checking income from all sources against TDS entries in Form 26AS and ensuring deductions are properly accounted for. TaxBuddy automates this verification, cross-checking TDS and income entries to ensure they align with official records. This minimizes errors, helps avoid notices from the Income Tax Department, and facilitates smoother and faster refund processing.
Common Mistakes to Avoid While Filing ITR
Filing an Income Tax Return (ITR) may seem straightforward, but even small errors can lead to delays, notices, or mismatched TDS credits. Some of the most common mistakes taxpayers make include:
Incorrect PAN Entries: Entering the wrong Permanent Account Number (PAN) can invalidate the return and cause processing delays. Ensure the PAN matches exactly with your official documents.
Mismatch in TDS Records: Tax Deducted at Source (TDS) entries reported by employers or banks must align with the figures in your return. Failing to verify TDS details can lead to discrepancies and refund delays.
Wrong ITR Form Selection: Choosing an incorrect ITR form for your income type or category can result in the rejection of your return. It’s crucial to verify whether you need ITR-1, ITR-2, or any other specific form.
Overlooking Deductions and Exemptions: Many taxpayers forget to claim eligible deductions under Sections 80C, 80D, 80E, or exemptions likeHRA, LTA, and interest on home loans. Missing these reduces tax savings unnecessarily.
Using digital calculators, cross-verifying each entry, and following a guided filing process such as that offered by TaxBuddy can minimize errors and reduce the likelihood of receiving notices from the Income Tax Department.
Tips for Stress-Free Mobile Filing Using TaxBuddy
The TaxBuddy mobile app simplifies the entire ITR filing process, allowing taxpayers to file returns efficiently from anywhere, without the need for extensive paperwork or manual calculations. Key features include:
Automatic Income Detail Fill-Up: The app can auto-populate income details from Form 16 and other income sources, saving time and reducing errors.
TDS Validation: TaxBuddy cross-checks all TDS entries with official records, ensuring accuracy and preventing mismatches that could delay refunds.
Accurate Tax Calculation: The app calculates taxes automatically based on the declared income and eligible deductions, preventing manual errors.
Instant E-Verification: After filing, the app allows instant e-verification of returns, completing the filing process without visiting tax offices.
Notifications and Guided Prompts: TaxBuddy provides step-by-step prompts and reminders, ensuring that every required section is completed accurately.
Anytime, Anywhere Filing: The mobile interface allows users to manage their taxes on the go, making filing convenient even for busy professionals.
By following these features, taxpayers can reduce stress, save time, and ensure a seamless and accurate ITR filing experience.
Conclusion
Filing ITR with both salary and freelance income requires careful documentation, accurate calculations, and correct reporting. Platforms like TaxBuddy streamline the entire process, reduce errors, and ensure timely compliance. For anyone looking for assistance in tax filing, it is highly recommended todownload 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? TaxBuddy provides both self-filing and expert-assisted plans. Users can choose self-filing if they are comfortable preparing their ITR themselves using a guided interface. Those with complex income sources, such as business or freelance income, or who prefer professional guidance, can opt for expert-assisted plans. This flexibility ensures that taxpayers at any level of experience can file accurately and efficiently.
Q2. Which ITR form should I choose if I have salary and freelance income? For taxpayers with salary and freelance income, ITR 1 can be used if freelance income is reported under the presumptive taxation scheme (Section 44ADA). If your freelance income does not qualify for presumptive taxation, ITR 4 is suitable, as it covers business or professional income under Section 44ADA. Selecting the correct ITR form ensures proper reporting and avoids notices from the Income Tax Department.
Q3. How can I claim deductions for health insurance and donations while filing ITR? Deductions under Section 80D for health insurance premiums and Section 80G for charitable donations can be claimed by providing supporting documents. For health insurance, enter policy details and premium amounts in the respective section. For donations, upload receipts and specify the donation category. Accurate documentation ensures deductions are applied without issues.
Q4. What is presumptive taxation under Section 44ADA? Presumptive taxation under Section 44ADA allows freelancers and professionals to declare 50% of their gross receipts as taxable income. This simplifies accounting by eliminating the need for detailed expense records. It reduces compliance burdens while ensuring legal tax reporting for freelance or professional income up to ₹50 lakh per year.
Q5. How do I report TDS for freelance work in ITR? Freelancers should report TDS as per Form 26AS. Verify the TDS entries against invoices and payments received. Any discrepancies should be reconciled before filing. Proper reporting of TDS ensures that your tax liability is accurately calculated and helps avoid mismatch notices from the Income Tax Department.
Q6. Can I file my ITR using the TaxBuddy mobile app? Yes, the TaxBuddy mobile app allows you to file, verify, and track your ITR directly from your smartphone. The app provides a guided process, calculates tax automatically, and allows e-verification, making it convenient for users who prefer mobile-based filing over desktop platforms.
Q7. What happens if I miss reporting freelance income correctly? Failure to report freelance income correctly can lead to notices from the Income Tax Department, along with potential interest and penalties. Undeclared or mismatched income may trigger scrutiny, making accurate reporting essential. Always cross-check invoices, receipts, and TDS entries before filing.
Q8. How do I verify my ITR after filing? After filing, you can verify your ITR via Aadhaar OTP, net banking, or by sending a signed ITR-V to CPC Bengaluru. Verification confirms the authenticity of your return and ensures that your filing is complete. Without verification, the ITR is considered invalid, which could lead to penalties or delayed refunds.
Q9. Can TaxBuddy calculate my tax automatically? Yes, TaxBuddy calculates tax liability automatically based on your salary, freelance income, TDS, and eligible deductions. This feature reduces human errors, ensures correct reporting, and provides clarity on how much tax is payable or refundable before submission.
Q10. What are common mistakes to avoid while filing ITR? Common mistakes include entering an incorrect PAN, selecting the wrong ITR form, mismatches in TDS entries, and missing eligible deductions. Careful review of personal details, income, and deductions before submission minimises errors, prevents notices, and ensures smooth processing of refunds.
Q11. Is it necessary to maintain records for freelance income? Yes, maintaining invoices, receipts, and bank statements for freelance income is essential. Proper records support accurate income reporting, help claim deductions, and are necessary in case of scrutiny by the Income Tax Department. Organised documentation reduces errors and facilitates compliance.
Q12. Does filing ITR with TaxBuddy guarantee faster refunds? While TaxBuddy cannot guarantee a fixed refund timeline, using its platform ensures accurate filing and TDS matching, which minimises errors that usually delay refunds. Accurate and complete filing increases the likelihood of quicker processing and timely receipt of refunds.
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