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ITR-4 allows only small long-term gains on listed equity under Sec 112A (up to ₹1.25 lakh for AY 2026-27) and total income up to ₹50 lakh. With other capital gains or higher income, a Sec 44ADA freelancer files ITR-3.
ITR
Freelancer with capital gains or high total income
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Provisions
Sec 44ADA, Income-tax Act 1961 (now Sec 58, Income-tax Act 2025); Sec 139(1), Income-tax Act 1961 (now Sec 263(1), Income-tax Act 2025)
Analysis
You can still use the presumptive scheme inside ITR-3. Example: deemed income ₹15 lakh from foreign clients plus a short-term gain of ₹80,000 on equity funds; ITR-4 is not allowed, so file ITR-3 with Sec 44ADA in Schedule BP and the gain in Schedule CG. Choosing the wrong form can lead to a defective return notice.
Close
- List all income including capital gains
- Check ITR-4 limits
- Use ITR-3 if any limit is crossed
- Show presumptive income and capital gains in their schedules
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