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Can I deduct internet expenses from my gross revenue if I use it for personal purposes too?

Papinder Singh (Taxpayer) (72 Points)

16 September 2020

Hi, I am a freelance software developer and I have an internet connection for which I pay Rs. 1000 every month. I use this for both professional and personal purposes, can I deduct this amount from my gross revenue?

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7 Replies

Rupesh Soni (Taxation Consultant & CA final student) (493 Points)
Replied 16 September 2020

Yes claim As exp fully

Papinder Singh (Taxpayer) (72 Points)
Replied 16 September 2020

Thank you Rupesh for your answer, what about other common expenses like electricity?

Rohit Gaur (47 Points)
Replied 17 September 2020

All the expenses which are partly for business purpose and partly personal should be claimed proportionally..

Papinder Singh (Taxpayer) (72 Points)
Replied 17 September 2020

Thank you for your reply Rohit-ji, how should we calculate the portions? Is it a simple 50/50 divide? If you know the relevant law sections etc., please cite them here.

CA Raj Doshi (Practising CA) (8723 Points)
Replied 17 September 2020

There is no percentage. It is your judgement based om facts and documents to prove your claim.

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Rohit Gaur (47 Points)
Replied 17 September 2020

Suppose your work for 8hrs, automatically it will be 1:2 work to personal ratio. further, please refer to section 14a of IT act and case law Maxopp Investment Ltd. v. Commissioner of Income Tax,

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Papinder Singh (Taxpayer) (72 Points)
Replied 17 September 2020

Thank you for your replies Raj Doshi-ji and Rohit-ji.

The most objective approach would be to use separate internet connection for business and personal purposes, but since I am just a single person this is not a good option as I have no established work place. So in this case I may determine a reasonable proportion of the costs that go towards professional usage.

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