Complete Guide to Filing ITR for Non-salaried Individuals in India

Learn how to file Income Tax Returns (ITR) as a freelancer, consultant, business owner, or professional in India.
Home Loan
2 min
17 June 2024

Filing Income Tax Returns (ITR) is a crucial aspect of financial responsibility for non-salaried individuals in India. Unlike salaried individuals who have their taxes deducted at source (TDS) by their employers, non-salaried individuals such as freelancers, consultants, business owners, and professionals are required to file their income tax returns independently. This comprehensive guide aims to demystify the process of filing Income Tax Return for non-salaried individuals, covering everything from understanding the types of ITR forms applicable to them to step-by-step instructions for e-filing and compliance with tax regulations.

Step 1: Understand your taxpayer category

Non-salaried individuals include self-employed people, professionals, business owners, partners in a firm, and freelancers or contractors. Each category corresponds with a different ITR form, so it's essential to identify which one applies to you to ensure a successful tax return filing. For instance, self-employed professionals and business owners usually have to fill out ITR-3 or ITR-4.

Step 2: Know your tax slabs

Just as with salaried individuals, non-salaried taxpayers are also categorised according to the income tax slabs. While the tax slab remains constant, the difference for non-salaried individuals lies in the calculation of gross total income, which comprises business income, house property income, and other sources of income.

Step 3: Gather your documents

The documents required for ITR filing by non-salaried individuals include:

  1. PAN Card
  2. Aadhaar Card
  3. Form 26AS (Tax Credit Statement)
  4. Bank account statements
  5. Profit and Loss (P&L) account statement and Balance Sheet (in case of businesses)
  6. Receipts of advance tax payments, if any

Step 4: Calculate your Gross Total Income (GTI)

Your GTI comprises various income sources, including income from business or profession, income from house property, capital gains, and income from other sources. While calculating your GTI, remember to deduct the necessary expenses incurred to earn your business or professional income.

Step 5: Calculate your taxable income

Once you have computed your GTI, calculate your taxable income by deducting the deductions available under various sections of the IT Act (like 80C, 80D, 24b, etc.) from your GTI.

Step 6: Compute your tax liability

After calculating your taxable income, apply the income tax rates to this sum to calculate your tax liability. Don't forget to add cess (4%) to the tax computed.

Step 7: File your ITR

The Income Tax Department of India allows e-filing, which is both convenient and time-saving. However, ensure you select the correct ITR form (ITR-3 or ITR-4) for your tax situation.

Step 8: Pay tax due, if any

In case your tax liability is greater than your TDS, you need to pay the additional tax. Conversely, if your TDS is greater than your computed tax, you will be eligible for a refund. The department will either directly deposit the refund to your bank account or send you a cheque.

Paying advance tax

Freelancers, self-employed professionals, and business owners should ideally pay advance tax in four instalments throughout the financial year. Failing to pay can result in penalties.

Chartered Accountants (CAs) can be a valuable resource to ensure accurate ITR filing, especially for non-salaried taxpayers who may have various income streams and expenses.

To ascertain financial stability and fulfil legal obligations, non-salaried individuals, including freelancers and business owners, must understand and follow the process of filing Income Tax Returns (ITRs). Rate slabs, relevant documents, calculations for Gross Total Income (GTI) and taxable income, tax liabilities, and advanced tax are all key considerations in this process. These careful steps ensure you're compliant with tax laws, and better position you for financial planning and securing loans.

In fact, when adequately managed, this understanding of your financial portfolio can open doors towards attractive avenues, such as home loans. Bajaj Housing Finance offers home loans specifically tailored to fit the varying needs of self-employed professionals, freelancers, business owners, and consultants. Recognising the unique income patterns of non-salaried individuals, Bajaj Housing Finance offers long repayment tenures, ensuring the loan doesn't strain your finances and aligns well with your income cycles.

Another merit of opting for Bajaj Housing Finance Home Loan is that it can positively influence your ITR process. By claiming deductions on the home loan interest repaid under Section 24(b) and principal repaid under Section 80C, you can effectively lower your taxable income, leading to substantial savings.

Here are a few reasons why you should opt for a Bajaj Housing Finance Home Loan:

  1. Extended repayment tenures: Benefit from repayment periods of up to 32 years, enabling you to select a plan aligned with your financial circumstances for more manageable repayments.
  2. Competitive interest rates: Initiate your journey to homeownership with attractive interest rates starting at just 7.99%*  p.a., accompanied by EMIs as low as Rs. 722/lakh*, making homeownership more affordable.
  3. Tailored loan options: Customise your home loan to suit your specific requirements with flexible loan amounts and repayment terms, granting you greater control over the home-buying process.
  4. Top-up loan facility: Enhance your financial flexibility with a top-up loan, providing additional funds of up to Rs. 1 crore* or higher at competitive interest rates and minimal documentation, simplifying balance transfer management.

Visit the Bajaj Finserv website to learn more and apply for a home loan today. Secure your financial future with the right investments and the right financial support.

Bajaj Finserv app for all your financial needs and goals

Trusted by 50 million+ customers in India, Bajaj Finserv App is a one-stop solution for all your financial needs and goals.

You can use the Bajaj Finserv App to:

  • Apply for loans online, such as Instant Personal Loan, Home Loan, Business Loan, Gold Loan, and more.
  • Invest in fixed deposits and mutual funds on the app.
  • Choose from multiple insurance for your health, motor and even pocket insurance, from various insurance providers.
  • Pay and manage your bills and recharges using the BBPS platform. Use Bajaj Pay and Bajaj Wallet for quick and simple money transfers and transactions.
  • Apply for Insta EMI Card and get a pre-qualified limit on the app. Explore over 1 million products on the app that can be purchased from a partner store on Easy EMIs.
  • Shop from over 100+ brand partners that offer a diverse range of products and services.
  • Use specialised tools like EMI calculators, SIP Calculators
  • Check your credit score, download loan statements and even get quick customer support—all on the app.

Download the Bajaj Finserv App today and experience the convenience of managing your finances on one app.

Do more with the Bajaj Finserv App!

UPI, Wallet, Loans, Investments, Cards, Shopping and more

Disclaimer

1. Bajaj Finance Limited (“BFL”) is a Non-Banking Finance Company (NBFC) and Prepaid Payment Instrument Issuer offering financial services viz., loans, deposits, Bajaj Pay Wallet, Bajaj Pay UPI, bill payments and third-party wealth management products. The details mentioned in the respective product/ service document shall prevail in case of any inconsistency with respect to the information referring to BFL products and services on this page.

2. All other information, such as, the images, facts, statistics etc. (“information”) that are in addition to the details mentioned in the BFL’s product/ service document and which are being displayed on this page only depicts the summary of the information sourced from the public domain. The said information is neither owned by BFL nor it is to the exclusive knowledge of BFL. There may be inadvertent inaccuracies or typographical errors or delays in updating the said information. Hence, users are advised to independently exercise diligence by verifying complete information, including by consulting experts, if any. Users shall be the sole owner of the decision taken, if any, about suitability of the same.

Frequently asked questions

Can we file an ITR of an unemployed person?
Yes, an unemployed person can file an Income Tax Return (ITR) especially if they had some form of income during the fiscal year. This could be from savings, investments, or a job they left during the year.
How to file ITR with no income?
Even if you have no income, you can still file an ITR. The form to be used is ITR-1 (Sahaj). Here, you can declare your zero income or loss from house property, if any.
Can we file ITR without a salary slip?
Yes, an ITR can be filed without a salary slip. Salary slips are not mandatory for ITR. Form-16 provided by employers or documents supporting any other sources of income can be used instead.
How can a non-salaried employee file ITR?
A non-salaried person such as a freelancer or self-employed individual can file ITR using the ITR-3 or ITR-4 form, depending on the nature of their income. These forms factor in income from business or profession, not just salary.
Show More Show Less