Many freelancers believe they don’t need to file an income tax return because they aren’t running a formal business. But the Income-tax Act treats most freelance activity as business income, regardless of whether the work is full-time or occasional.

ClearTax tax expert CA Chandni Anandan explains that Section 2(13) defines “business” broadly enough to include any trade or professional service. So income from tutoring, content creation, research projects, design assignments, consulting or coding work all fall under “business,” triggering tax obligations when certain thresholds are crossed.

How presumptive taxation applies to freelancers

To simplify compliance for small taxpayers, the Act offers the Presumptive Taxation Scheme, which many freelancers can use instead of maintaining detaile

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