Hi, I am a professional software developer (freelancer) and I purchased a laptop for Rs. 50,000 1 year before I generated income, can I deduct this (after depreciation) from my gross revenue?
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Can I claim part of laptop expenses that I bought before generating income?
Replies (17)
You can deduct entire laptop cost but you can only deduct depreciation from gross revenue
Sorry Eswar-ji, I did not understand your reply. You said I can deduct entire laptop cost, how can this be done? Did you mean "can't"?
You can capitalised your laptop cost as Fixed assets in books of your Business. and than can Claim depreciation at prescribed rate on that.
So, Show Laptop as fixed assets in Business balance Sheet and the claim depreciation on that, This depreciation is deducted from your revenue every year till amount of laptop goes NIL in balance sheet.
So, Show Laptop as fixed assets in Business balance Sheet and the claim depreciation on that, This depreciation is deducted from your revenue every year till amount of laptop goes NIL in balance sheet.
Thank you for the answer Sagar-ji, but I am not running a business and I do not maintain books (I file under presumptive-scheme as I earn less than 50L).
Can I do the same as a professional/individual? (i.e claim depreciation until amount of laptop goes to NIL)
If you are filing return return under Presumptive Taxation u/s 44ADA, than your income will be considered as 50% of your Gross receipt.
In this case you are not allowed to claim any expenses/depreciation ect. as 50% lumpsum Deduction for Expenses is already given by Government to you...and only remaining 50% is taxable...
In this case you are not allowed to claim any expenses/depreciation ect. as 50% lumpsum Deduction for Expenses is already given by Government to you...and only remaining 50% is taxable...
Sagar-ji, do you mean if I file under 44ADA presumtive taxation scheme, only 50% of my gross revenue is my net income? Meaning if I generate 20L in revenue only 10L is taxable, and no need to maintain any books, receipts etc.? 🤯
If you are filing ITR-3 then you may claim only depreciation and can't deduct laptop cost.
If you are filing ITR-4 then no deduction is allowed.50% income is treated as net income after all deductions except 80C to 80U
If you are filing ITR-4 then no deduction is allowed.50% income is treated as net income after all deductions except 80C to 80U
Yes, u/s 44ADA if as software developer, you received Professional fee of Rs. 20 lakh..than 50% of that say.. 10 lakh is considered as your profit from Software development business and tax is payable on that 10 lakh.
Thank you Sagar-ji, this is the best news of the day... :)
Eswar-ji, yes, I am filing ITR-4.
You're most welcome Papinder Singh-ji.....
#Happpy to help you...😊
#Happpy to help you...😊
Bt for that you are required to maintain books of account u/s 44aa but the books are not required to be audited u/s 44ad.
Rohit-ji, that is confusing, doesn't 44ADA provide benefit of not maintaining books for everyone who opts for it? In what circumstances are we required to maintain books while filing under 44ADA Presumptive Tax Scheme for Professionals?
Filing return under 44ada will exempt you to get your books audited under 44ab. but still you will have to maintain books of account if crossing the limits as prescribed u/s 44aa i.e. for individual or huf if nti greater than 2.5l or turnover more than 25 lac.
Rohit-ji, I am not maintaining any official "books" but I have a personal record of all my transactions, what is your suggested course of action? Since I am exempt from audit of books, shall I just submit my ITR without showing any books? Sorry for the questions, this is my first time paying income tax. Thank you for your answers.
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