Celebrate Freedom with 20% OFF on CAclubindia Pro Subscription. Use Code: FREEDOM20

Percentage of income allowed as deductions

Tax planning 600 views 1 replies

aakashsgoyal

Others

24 Points Joined January 2015

Hi,,

I am working as a freelancer and independent consultant in the software domain and most of my clients are from abroad. I have an office and pay bills for internet/petrol/travel for my business for which I have hard copies. As far as I know these expenses can be deducted from my taxable income. However I also pay people for some jobs that I outsource to them. Can these be deducted from my income as well? For instance I get 10L as income in my bank accounts can I show 8L as expenses? What percentage of total income can I show as expenses?

Please let me know.

Thanks,

Aakash

Replies (1)

Pranjal Mittal

Student

90 Points Joined November 2012

Being a professional if your total turnover does not exceed ₹25 lakhs you can declare a profit of 8% presumptive basis. However if your income exceeds ₹25 lakhs then you need to maintain books of accounts and show actual expenses.