![]() Local taxes and insurance for your own business property.It can be claimed when you conduct client meetings, take your clients out for dinner, or some other outings and money has been solely spent with the intention of getting new business or retaining existing business. Meal, entertainment or hospitality expenses.The cost of travel to meet your clients within or outside of India is allowed as a deduction. Note that the type of assets, methods of depreciation, and rates of depreciation to be charged are laid down by the Income Tax Act itself and those shall be applied.Įxpenses incurred to carry out your work such as purchasing a printer, office supplies, your monthly telephone bills, internet bills, and conveyance expenses can be claimed as a deduction. In the next 3 years, we would consider the asset to be fully depreciated. Assuming a straight-line depreciation of 33.33% each year, Rs.20,000 shall be charged as expenses yearly. This expense charged every year is called depreciation.įor instance, when you buy a laptop for Rs.60,000 to do your freelance work, Rs.60,000 will be considered your asset. Every year a small portion of its cost is expensed and is allowed to be reduced from your income. Such assets are capitalized and not charged to expenses when they are bought. When you purchase a capital asset, the benefit of such an asset is usually expected to last more than a year. Any repairs to your laptop, printer and other equipment are also allowed to be deducted. If you own the business property and carry out repairs, those are also allowed to be deducted. If you have agreed to pay for repairs to the rented property, then these repair costs can be deducted. If you take a property on rent for carrying out your work, the rent paid can be deducted. It is not incurred for any purpose which is an offence or is prohibited by lawĮxpenses that can be claimed as a deduction against income. ![]() It is not a capital expenditure or a personal expenditure of the freelancer.It has been spent fully and exclusively for the purpose of your work.The expense is for the freelancing work being carried on.Conditions to claim expenses as a deduction from freelancing income These expenses must be directly related to the job you are doing. It could be anything from office furniture to cab fares to visit clients. Expenses allowed as a deductionįreelancers can deduct expenses they incurred to do the job from their income. Your bank account statement is a document you can rely on to cull out this information, provided that you have received all your professional income through banking channels. Your gross income will be the aggregate of all receipts you get while carrying out your profession. Such income will be taxable as “Profits and Gains from Business or Profession”. You are not required to go to the office – in fact, and you can complete the work at leisure (by the pre-agreed deadline) from any place convenient to you.Īny income you earn by displaying your intellectual or manual skills is the income from a profession according to income tax laws in India. ![]() You will not get perks (like PF) mandated by the Company Act. You will not be an employee of the company or placed on their payroll. Freelancing income comes into the picture when you get hired to work on specific assignments for a particular term and get paid for the work upon completion and submission.
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