The Income Tax Department has released updated compliance norms for individuals earning income from business or profession for the Assessment Year 2025–26. These provisions are critical for self-employed professionals, small business owners, and freelancers across India.
According to the Income Tax Act, individuals who generate income through proprietorships, freelancing, or professional services must declare such income under the “Profits and Gains from Business or Profession” head.
For AY 2025–26, taxpayers must report:
Gross receipts
Net profit/loss
Business-related deductions
Depreciation on assets, if applicable
Eligible individuals can also opt for presumptive taxation under Section 44ADA (for professionals) or Section 44AD (for small businesses), which simplifies tax filing by allowing tax to be paid on a presumed percentage of turnover.
Important Note: If your turnover exceeds the prescribed limits, you are required to maintain books of accounts and may also need to get your accounts audited under Section 44AB.
The due date to file your Income Tax Return (ITR) is July 31, 2025, unless extended. Late filing may attract penalties and interest under Sections 234F and 234A.
India Advocacy’s Advice:
If you are a sole proprietor, consultant, or independent professional, now is the right time to:
Reconcile your books
Verify TDS credits in Form 26AS
Choose the correct ITR form (usually ITR-3 or ITR-4)
For tax filing support, reach out to our compliance experts at India Advocacy. We help individuals and small businesses file accurate and timely returns to stay fully compliant.
