Income tax for self-employed - freelancer

It is not just payment of tax , which a freelancer in India is supposed to understand in terms of his/her legal liability.

Let us first deal with your income tax problems
 

1. If you earn above Rs 2 Lakh for Fy 2014-15, it is  mandatory for you to  file return of income  u/s 139 of the Income tax Act.
2. It is also mandatory for you to maintain books of accounts .
3. It is also mandatory for you to get your accounts audited if gross earning as professional is more than 25 lakhs in a year.

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Thus, you need to follow all the income tax rules, normally. And yes, like a common businessman, you will get deductions for the expenses you incurr to carry out your activities.

Hence, as far as common understanding is concerned, your taxable income would be considered is Rs. 3 Lakhs

1) I use to maintain all my financial details including Due, Income and Expense in excel sheet. Is this legally enough to maintain "Books of Accounts" like this?

2) I think I have to pay tax on the income (for freelancer profit) above Rs. 2,50,000. Is this right?