Ultimate ITR Filing Guide for Non-Salaried Individuals in India

Ultimate ITR Filing Guide for Non-Salaried Individuals in India
Ultimate ITR Filing Guide for Non-Salaried Individuals in India
13 September 2025
For non-salaried individuals in India (freelancers, professionals, business owners), filing an Income Tax Return (ITR) for FY 2024-25 involves choosing the correct form (ITR-3 or ITR-4), calculating income by deducting business expenses from gross receipts, and paying Advance Tax quarterly. The Presumptive Taxation Scheme under Section 44AD or 44ADA is a simplified option for eligible taxpayers to declare income as a percentage of their turnover, using ITR-4 (Sugam).

Key Takeaways
Who is Non-Salaried?: This includes freelancers, consultants, doctors, lawyers, architects, small business owners, shopkeepers, and anyone with income from a business or profession.
Choosing the Right Form:
ITR-4 (Sugam): For individuals opting for the Presumptive Taxation Scheme (turnover up to ₹2 Crore for business / gross receipts up to ₹75 Lakh for professionals).
ITR-3: For individuals with business/professional income who do not opt for the presumptive scheme or whose turnover exceeds the limit. This form requires a detailed Profit & Loss statement and Balance Sheet.
Presumptive Taxation (The Simple Way): This scheme simplifies tax filing. Professionals (Section 44ADA) can declare 50% of their gross receipts as income. Businesses (Section 44AD) declare 8% or 6% (for digital receipts) of their turnover as income.
Advance Tax is a Must: If your total tax liability for the year is expected to be ₹10,000 or more, you must pay Advance Tax in four installments throughout the year.
Table of Contents
Are You a Non-Salaried Taxpayer? Understanding the Category
Why ITR Filing is Even More Critical for Professionals and Business Owners
ITR-3 vs. ITR-4 (Sugam): Choosing the Correct ITR Form
The Presumptive Taxation Scheme: Simplified Taxes for Small Businesses & Professionals
Calculating Your Taxable Income: The Non-Salaried Formula
Common Allowable Business Expenses You Can Claim
The Golden Rule: Understanding Your Advance Tax Liability
A Step-by-Step Guide to Filing ITR-4 (Sugam) Online
ToraTax: Your Partner in Business and Professional Tax Compliance
Frequently Asked Questions (FAQs)

1. Are You a Non-Salaried Taxpayer? Understanding the Category If your income doesn’t come from a monthly salary credited by an employer, you likely fall into the non-salaried category. This is a broad group of enterprising individuals driving a significant part of the Indian economy.

You are a non-salaried taxpayer if you are a:

Freelancer or Consultant: Writers, designers, developers, and marketers working on a project basis.
Professional: Doctors, lawyers, chartered accountants, architects, and engineers running their own practice.
Small Business Owner: A shopkeeper, trader, manufacturer, or someone running an e-commerce store.
Gig Economy Worker: A delivery partner or cab driver affiliated with platforms like Zomato, Swiggy, Uber, or Ola.
Whether you’re a freelance photographer in Mumbai or a small boutique owner in Jaipur, the principles of income tax apply to you, but the process of calculation and filing is fundamentally different from that of a salaried person.

1. Why ITR Filing is Even More Critical for Professionals and Business Owners For a non-salaried individual, an Income Tax Return is not just a tax document; it’s a financial need. It validates your business’s health and your credibility.

Essential for Loans: Banks and NBFCs mandatorily require the last 2-3 years of ITRs to approve business loans, home loans, or even vehicle loans. Your ITR is the primary proof of your business’s income and repayment capacity.
Visa and Credit Card Applications: A healthy ITR filing record is crucial for visa processing for most countries and for securing high-limit credit cards.
Claiming Refunds: If you have paid excess tax (e.g., TDS deducted by a client on your professional fees), filing an ITR is the only way to get a refund.
Business Credibility: For a consultant in Bangalore’s tech ecosystem or a trader in Delhi’s bustling markets, a clean tax record builds trust with clients, suppliers, and potential partners.
Avoid Scrutiny: Timely and accurate filing keeps you off the Income Tax Department’s radar and prevents notices and penalties for non-compliance.

1. ITR-3 vs. ITR-4 (Sugam): Choosing the Correct ITR Form This is the most critical decision for a non-salaried taxpayer. Your choice depends on your turnover and whether you opt for the Presumptive Taxation Scheme.

Feature ITR-4 (Sugam) ITR-3
Who Should Use It? Individuals with business/professional income opting for the Presumptive Taxation Scheme (u/s 44AD, 44ADA, 44AE). Individuals with business/professional income not opting for the presumptive scheme.
Turnover/Receipts Limit Business Turnover ≤ ₹2 Crore. Professional Receipts ≤ ₹75 Lakh. No limit, but audit is required if turnover exceeds specified limits.
Complexity Simple: No need to maintain detailed books of accounts. Income is a fixed percentage of turnover. Complex: Requires maintaining detailed books of accounts. You must prepare a Profit & Loss Account and Balance Sheet.
Best For Freelancers, small professionals, and small business owners who want simplified compliance. Larger businesses, professionals who want to claim expenses higher than the presumptive limit, or those with capital gains.

1. The Presumptive Taxation Scheme: Simplified Taxes for Small Businesses & Professionals The Presumptive Taxation Scheme is a game-changer designed by the government to reduce the compliance burden on small taxpayers. It allows you to calculate your income on a “presumed” basis.

For Professionals (Section 44ADA)
Eligibility: Resident Indian professionals like doctors, lawyers, engineers, architects, CAs, and certain consultants with gross annual receipts up to ₹75 Lakh.
How it Works: You can declare 50% of your total gross receipts as your taxable income. The remaining 50% is presumed to be your expense. You don’t need to provide proof of expenses.
Example: A freelance software developer in Pune earns ₹40 Lakh in FY 2024-25. Under Section 44ADA, her taxable income is simply 50% of ₹40 Lakh, which is ₹20 Lakh. She will pay tax on this amount.
For Businesses (Section 44AD)
Eligibility: Eligible resident individuals, HUFs, and partnership firms with an annual turnover up to ₹2 Crore.
How it Works:
Declare 8% of your total turnover as your income.
If your receipts are through digital modes (bank transfer, UPI, debit/credit card), you can declare just 6% of that portion as your income.
Example: A kirana store owner in Hyderabad has a total turnover of ₹80 Lakh. Out of this, ₹60 Lakh was received via UPI and cards, and ₹20 Lakh in cash.
Presumptive Income (Digital): 6% of ₹60 Lakh = ₹3,60,000
Presumptive Income (Cash): 8% of ₹20 Lakh = ₹1,60,000
Total Taxable Income: ₹5,20,000

1. Calculating Your Taxable Income: The Non-Salaried Formula (for ITR-3) If you are not using the presumptive scheme (i.e., filing ITR-3), your taxable income is calculated traditionally:

Gross Annual Receipts - Allowable Business Expenses = Taxable Profit

You must maintain proper records of all your income (invoices raised) and all your business-related expenses (receipts and bills).

1. Common Allowable Business Expenses You Can Claim Any expense incurred “wholly and exclusively” for the purpose of your business or profession can be claimed to reduce your taxable profit.

Rent: Office rent or even a portion of your home rent if you use a part of your home as an office.
Repairs & Maintenance: Expenses on repairing office equipment, machinery, or furniture.
Depreciation: Claim depreciation on assets like laptops, vehicles, or office furniture as per the rates specified in the Income Tax Act.
Travel & Conveyance: Costs for business-related travel, including fuel, cab fares, and tickets.
Communication: Telephone bills, internet charges, and domain/hosting expenses.
Professional Fees: Payments to a lawyer, consultant, or CA for professional services.
Salaries: If you have employees, their salaries are a deductible expense.
Office Supplies: Stationery, printing, and other consumables.
Software & Subscriptions: Annual fees for software like Adobe Creative Suite, Microsoft 365, or other professional tools.

1. The Golden Rule: Understanding Your Advance Tax Liability This is non-negotiable for non-salaried individuals. If your estimated tax liability for the financial year is ₹10,000 or more, you must pay Advance Tax. You cannot wait until the end of the year. The tax must be paid in quarterly installments.

Due Dates for Advance Tax (FY 2024-25):

Installment Due Date Amount Payable (Cumulative)
1st By June 15, 2024 15% of total estimated tax
2nd By September 15, 2024 45% of total estimated tax
3rd By December 15, 2024 75% of total estimated tax
4th By March 15, 2025 100% of total estimated tax
Note: Taxpayers opting for the Presumptive Scheme u/s 44AD or 44ADA can pay their entire Advance Tax in one installment by March 15, 2025.

1. A Step-by-Step Guide to Filing ITR-4 (Sugam) Online Here’s a simplified guide to filing the presumptive income tax return online.

Step 1: Log in to the e-Filing Portal

Visit the official Income Tax portal: https://www.incomax.gov.in/.
Log in with your PAN (User ID) and password.
Step 2: Start the Filing Process

Go to ‘e-File’ > ‘Income Tax Returns’ > ‘File Income Tax Return’.
Select Assessment Year 2025-26, Mode of Filing as ‘Online’, and your status as ‘Individual’.
Step 3: Select the ITR Form

Choose the ITR Form as ITR-4. The system may also recommend this based on your profile.
Step 4: Fill in the Schedules

The ITR-4 form has several schedules. The most important one is ‘Schedule BP’ (Business/Profession).
Here, you need to enter your Gross Turnover/Receipts. The portal will automatically calculate your presumptive income at 8%/6% (for business) or 50% (for profession).
Fill in your financial particulars like total sundry debtors, creditors, stock-in-trade, and cash-in-hand.
Step 5: Verify Other Details

Proceed through the other tabs: Personal Information, Gross Total Income, Disclosures, Total Deductions, Tax Paid, and Total Tax Liability.
Verify all the pre-filled data, especially details in your Form 26AS regarding TDS.
Step 6: Pay Tax (if any) and Submit

After reviewing, if there is any tax due, pay it immediately.
Preview your return, and once you are sure all details are correct, submit it.
Step 7: E-Verify Your Return

Your return is invalid until verified. E-verify within 30 days using Aadhaar OTP or other available methods.

1. ToraTax: Your Partner in Business and Professional Tax Compliance From bookkeeping and GST filing to complex ITR-3 submissions, managing finances can be overwhelming. ToraTax provides specialized tax filing services for freelancers and businesses across India.

Our experts in Delhi, Bangalore, Chennai, and other cities can help you with:

Accurate bookkeeping and expense management.
GST Registration and filing.
Advance Tax calculation and payment.
Error-free ITR filing to maximize your deductions and ensure compliance.
10.ToraTax Services Across India
ToraTax provides comprehensive tax and financial services across all major Indian metropolitan areas. Our team of CAs and tax experts are available to assist you in:

Delhi NCR (including Gurgaon and Noida)
Mumbai
Bangalore
Chennai
Pune
Hyderabad
Kolkata
Ahmedabad
Jaipur
And over 100+ cities across the nation.
Contact us for personalized tax planning, ITR filing, GST services, and business registratio

1. Frequently Asked Questions (FAQs) Q1: I am a freelancer with a total income of ₹60 Lakh. Can I use the Presumptive Scheme?

Yes. Since your gross receipts are below the ₹75 Lakh threshold for professionals, you are eligible for the Presumptive Taxation Scheme under Section 44ADA. You can file ITR-4 and declare 50% of your receipts (₹30 Lakh) as your taxable income.

Q2: What happens if I miss paying my Advance Tax installments?

If you fail to pay Advance Tax on time, you will be liable to pay interest under Section 234B and 234C of the Income Tax Act.

Q3: Can I claim business expenses if I opt for the Presumptive Taxation Scheme?

No. If you opt for the presumptive scheme, the 50% (for professionals) or 92%/94% (for businesses) of your turnover that is not taxed is deemed to be your total business expense. You cannot claim any further expenses against the presumed income.

Q4: I am a doctor running a clinic in Chennai. Which ITR form should I file?

As a doctor, you are a specified professional. If your gross receipts are under ₹75 Lakh, you can opt for the Presumptive Scheme (Section 44ADA) and file the simple ITR-4 form. If your receipts exceed this limit or you want to claim actual expenses, you must file ITR-3.

Q5: Is it mandatory to maintain books of accounts? A: If you file ITR-3, you must maintain proper books of accounts. If you opt for the Presumptive Scheme (ITR-4), you are not required to maintain detailed books of accounts for income tax purposes.