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As a legal professional, you’re well-versed in drafting arguments and presenting cases—but when it comes to income tax return (ITR) filing, the rules of the courtroom don’t apply. Whether you practice independently or are part of a legal firm, filing your income tax return accurately and on time is important to ensure compliance with the Income Tax Act and to avoid any penalties. With multiple sources of income—like professional fees, retainers, consultancy, and even interest or capital gains—lawyers often face complexities while reporting income. This guide simplifies the ITR filing process for advocates and lawyers, outlining key considerations, eligible deductions, and the right ITR form to use.
Latest updates
- ITR filing Due date for FY 2024-25 (2025-26) has been extended from 31st July 2025 to 15th September 2025
Taxation of Practicing Lawyer
Practicing lawyers, by virtue of actively engaging in legal services, fall under the category of individuals carrying on a “Profession” for income tax purposes. As such, their income is taxable under the head “Profits and Gains from Business or Profession” as per the Income Tax Act.
However, there’s a significant provision under section 10(2A) that provides relief to practicing lawyers who are partners in law firms and receive a share of profits from such firms. This provision exempts the profits received by the practicing lawyer from tax in their hands.
Conditions for Exemption:
For this exemption to apply, two conditions must be met:
Partnership in Law Firm: The practicing lawyer must be a partner in one or more law firms.
Share in Firm’s Profits: The practicing lawyer should receive a share in the profits of the law firm(s) where they are a partner.
Rationale behind the Exemption:
The rationale behind this exemption lies in avoiding double taxation. The profits earned by the law firm have already been subjected to tax at the firm’s level. Taxing these profits again in the hands of individual partners (practicing lawyers) would result in double taxation, which is inequitable and can discourage partnership structures within law firms.
Presumptive taxation scheme for lawyers and advocates
The Presumptive Taxation Scheme for lawyers is available under Section 44ADA of the Income Tax Act, 1961. It offers a simplified method of calculating income for professionals, including legal practitioners, by reducing the burden of maintaining detailed books of accounts.
Here are the key features of the scheme:
Applicable to resident individuals, Hindu Undivided Families (HUFs), and partnership firms (excluding LLPs) engaged in specified professions, including legal services.
Gross receipts from the profession must not exceed ₹50 lakh in a financial year.
Under this scheme, 50% of the gross receipts are treated as the deemed income and taxed accordingly.
No need to maintain detailed books of account under Section 44AA or get accounts audited under Section 44AB.
The remaining 50% is presumed to cover all expenses such as rent, salaries, office costs, etc.
If actual income is lower than 50% and the assessee wishes to declare it, they must maintain proper books and get them audited if their income exceeds the basic exemption limit.
Lawyers opting for Section 44ADA can still claim deductions under Chapter VI-A like 80C, 80D, etc., from the presumptive income.
This scheme is particularly useful for self-employed lawyers and advocates who want to simplify their income tax compliance while enjoying reduced paper work.
Taxation of Non Practicing Lawyer
Non-Practicing Lawyers Receiving Professional Fees:
Some non-practicing lawyers may engage in advisory services or consultancy work, for which they receive professional fees. In such cases, even though they are not actively practicing law in the traditional sense, they are still deemed to be carrying on a “Profession” for taxation purposes.
As a result, the income earned by these non-practicing lawyers from professional fees is charged to tax under the head “Profits and Gains from Business or Profession” as per the Income Tax Act. Similar to practicing lawyers, they are required to maintain proper books of accounts and meet other income tax compliance requirements applicable to professionals.
The rationale behind taxing professional fees earned by non-practicing lawyers under the head of business or profession is to ensure consistency in the income tax treatment of similar income sources. Regardless of whether the lawyer is actively practicing or providing advisory services, the income generated from their professional expertise is subject to taxation under the same category.
Non-Practicing Lawyers Receiving Salaries:
Non-practicing lawyers who are employed by law firms, corporate entities, government agencies, or any other organizations and receive salaries are treated akin to any other salaried employee for tax purposes. Their income is charged to tax under the head “Income from Salaries” as per the Income Tax Act.
What are Deductions and exemptions available to Lawyers and Advocates?
- Section 80C Deduction for investments in PPF, ELSS, life insurance premiums, NSC, and tax-saving FDs
- Section 80D Deduction for health insurance premiums paid for self and family
- Section 80G Deduction for donations made to eligible charitable institutions
- Section 80TTA Deduction for interest earned on savings bank accounts (up to ₹10,000)
- Section 80E Deduction for interest on education loans for self, spouse, or children
- Section 80CCD(1B) Deduction for additional contribution to the National Pension Scheme (up to ₹50,000)
- Business expense deductions under Section 30 to 37, including rent, electricity, staff salaries, legal subscriptions, office expenses, and depreciation
- Standard deduction of ₹50,000 (₹75,000 in new tax regime) available if the lawyer is employed and receiving a salary income
Income tax Slab rates for Lawyers
Old tax Regime
| Income | Tax rates |
| Upto ₹ 2.50 lakh | 0% |
| ₹ 2.50 lakh – ₹ 5 lakh | 5% |
| ₹ 5 lakh – ₹ 10 lakh | 20% |
| Above ₹ 10 lakh | 30% |
You Can claim deduction under Section 80C, 80D, 80G, etc
For senior citizen (age between 60 & 80 years), tax rate is 0% upto ₹ 3 lakhs. Rest of the rates are same.
For super senior citizen (age above 80 years), tax rate is 0% upto ₹ 5 lakhs. Rest of the rates are same.
In Old tax regime, a maximum tax rebate under section 87A of Rs. 12,500 is available for income upto Rs. 5 lakhs meaning your income is totally tax free till Rs. 5 lakhs. The rebate under section 87A is not allowed to a Non-resident.
New tax Regime (FY 23-24)
| Income | Tax rates |
| Upto ₹ 3 lakh | 0% |
| ₹ 3 lakh – ₹ 6 lakh | 5% |
| ₹ 6 lakh – ₹ 9 lakh | 10% |
| ₹ 9 lakh – ₹ 12 lakh | 15% |
| ₹ 12 lakh – ₹ 15 lakh | 20% |
| More than ₹ 15 lakh | 30% |
New tax Regime (FY 24-25)
Income | Tax Rate |
Upto ₹ 3 lakh | 0% |
₹ 3 lakh – ₹ 7 lakh | 5% |
₹ 7 lakh – ₹ 10 lakh | 10% |
₹ 10 lakh – ₹ 12 lakh | 15% |
₹ 12 lakh – ₹ 15 lakh | 20% |
Above ₹ 15 lakh | 30% |
New tax Regime (FY 25-26)
| Income Range (₹) | Tax Rate |
|---|---|
| Upto ₹ 4 lakh | Nil |
| ₹ 4 lakh – ₹ 8 lakh | 5% |
| ₹ 8 lakh – ₹ 12 lakh | 10% |
| ₹ 12 lakh – ₹ 16 lakh | 15% |
| ₹ 20 lakh – ₹ 20 lakh | 20% |
| ₹ 20 lakh – ₹ 24 lakh | 25% |
| Above ₹ 24 lakh | 30% |
Which ITR form is applicable for lawyers?
Lawyers and advocates are generally required to file either ITR-3 or ITR-4, depending on the nature and structure of their income. If a lawyer earns income from the legal profession (as a sole proprietor or freelancer) and maintains regular books of account, ITR-3 is applicable. However, if the gross receipts from the profession do not exceed ₹50 lakh in a financial year, and the lawyer opts for the presumptive taxation scheme under Section 44ADA, then ITR-4 (Sugam) can be used. Lawyers earning only salary (as employed in a law firm or organization) and no professional income should file ITR-1 or ITR-2, based on other sources of income.
TDS on lawyer fees
Tax Deducted at Source (TDS) for lawyers applies primarily under Section 194J of the Income Tax Act, which deals with payments made for professional services.
What is the Applicability?
TDS is deducted when a lawyer or advocate provides professional services to a client (individuals, firms, companies, etc.), and the payment exceeds the threshold limit in a financial year.
What is the Rate of TDS?
TDS is deducted at 10% under Section 194J on professional fees paid to lawyers.
What is the Threshold Limit?
TDS is applicable if the total fees paid to a lawyer exceed ₹30,000 in a financial year by a single payer (This limit is now revised to ₹50,000 from FY 2025-26 onwards).
When TDS is Not Required?
- If the total payment during the year does not exceed ₹30,000.
- If the payer is an individual or HUF who is not required to deduct TDS (i.e., not liable for tax audit under Section 44AB).
- If the lawyer submits a lower/nil deduction certificate under Section 197.
Credit of TDS:
The amount of TDS deducted appears in Form 26AS and can be claimed as a credit while filing the income tax return.
TDS on Retainership or Consultancy:
Any retainership or consultancy fee paid to lawyers is also subject to TDS under the same provisions.
In summary, lawyers receiving professional income from clients may be subject to TDS deductions, and they must account for these credits while computing their final tax liability.
Benefits of ITR Filing for Lawyers and Advocates
- Helps prevent late fees and interest by filing within the due date
- Required for obtaining personal, home, or business loans and insurance policies
- Acts as valid proof of income for visa applications and government tenders
- Enables carry forward of business or capital losses to future years
- Allows claiming deductions under sections like 80C, 80D, and 80G
- Facilitates TDS refunds in case of excess tax paid or TDS deducted
- Enhances financial credibility for empanelment or professional recognition
- Essential for business registration, opening current accounts, and expanding legal practice
Process ITR filing for lawyers
1. Login to Income Tax Portal
Visit www.incometax.gov.in/iec/foportal/, click on Login. Enter your PAN and password
2. Choose e-Filing of Income Tax Return
Go to e-File > Income Tax Return > File Income Tax Return.
3. Select Assessment Year and Mode
Choose the correct Assessment Year (example: FY 2024-25 = AY 2025-26). Select Online mode for guided filing unless you prefer offline utilities.
4. Choose Status
Select your filing category: Individual.
5. Select ITR Form
Lawyers usually choose:
ITR-3: If maintaining books of accounts or receiving professional income above Rs 50 lakh.
ITR-4: If opting for Presumptive Taxation Scheme under section 44ADA and total receipts are up to Rs 75 lakh (with digital transactions).
6. Fill Personal Information and Bank Details
Pre-filled data will appear. Confirm PAN, Aadhaar, address, email and valid bank account for refund.
7. Income Details
Declare professional income under ‘Income from Business/Profession’
If under 44ADA (presumptive), show 50% of gross receipts as income (no need for books)
Otherwise, report actual profit and expenses based on books
Enter income from other sources like interest
Include rent, capital gains, etc. if applicable
8. Claim Deductions under Chapter VI-A
Enter deductions under 80C, 80D, 80G, etc.
9. Tax Paid and TDS
Validate auto-filled details from Form 26AS and AIS
Include TDS deducted by clients under section 194J
Include advance tax and self-assessment tax paid
10. Compute Tax and Pay if Due
System will calculate tax. Pay any balance tax using Challan 280 if required and enter payment details.
11. Validate, Preview, and Submit
Review all details. Use the validation button to check errors. Submit the return.
12. e-Verify ITR
e-Verification is mandatory. Options:
Aadhaar OTP
Net banking
Bank account EVC
Demat account
Or send signed ITR-V to CPC Bengaluru within 30 days
Once verified, you will receive an acknowledgment on your email. This completes the process.
Due date of ITR filing for lawyers
The Due date to file Income tax return for FY 2024-2025 (AY 2025-2026) is 31st July,2025 which is extended to 15 th September, 2025.
In case you miss this deadline then you can file belated ITR till 31st December, 2025 with late fees.
Also for any mistake made while filing ITR before due date, you can make corrections by filing Revised ITR any number of times till 31st December, 2025
If you miss deadline of Belated income tax return filing then you can file Updated ITR (ITR U) till 4 years from the end of relevant assessment year with late fees and additional taxes.
What happens if ITR is not filed?
Penalty under Section 234F for late filing
Inability to claim TDS refund
Losses cannot be carried forward
May receive income tax notice or scrutiny
No legal proof of income for loans or visas
Missed opportunity to correct errors through revised return
Risk of prosecution in case of willful default
Trouble in government or professional registrations
Looking for help?
At A R Dhorajiya & Co., we specialize in income tax return filing for lawyers and advocates – whether you’re self-employed, on retainership, or salaried in a law firm. From choosing the right ITR form to optimizing deductions under Section 44ADA, we ensure complete compliance with minimal effort on your part.
Let us handle your taxes so you can focus on your cases.
Contact us today at +91 9769647582 for a consultation or to get started with your ITR filing
Frequently Asked Questions
Yes, lawyers and advocates must file an Income Tax Return (ITR) if their total income exceeds the basic exemption limit of Rs. 2,50,000. Filing ITR is mandatory for legal professionals, whether they are self-employed or salaried.
TDS is deducted at 10% under Section 194J on professional fees paid to lawyers if the total payment exceeds ₹30,000 in a financial year till FY 24-25 and ₹50,000 in a financial year from FY 25-26 onwards.
An advocate practicing independently is considered a self-employed professional under the Income Tax Act and taxed under “Profits and Gains from Business or Profession.”
Lawyers are taxed as per the applicable income tax slab rates (old or new regime). Under Section 44ADA (presumptive scheme), 50% of gross receipts are considered taxable income and taxed at slab rates.
Yes, individuals can choose or switch between the old and new tax regimes while filing their ITR each year (except for those having business income, who must stick to one regime unless formally changed through Form 10-IEA).
Self-employed lawyers do not deduct TDS on their income, but clients may deduct TDS while making payments to them. If a lawyer pays fees to another professional and is liable for tax audit, they must deduct TDS.
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