Are freelancers eligible for tax benefits?

I am 27 years single and residing in Bengaluru. I plan to be a freelancer offering services in graphic designing. I am not sure of the tax rules for a freelancer and if can avail tax benefits under Section 80C like salaried employees. Please could you tell me if freelancers are eligible for tax benefits?

Asked by : Manju - Bengaluru | 329 Views

Being a freelancer gives you dual tax benefits.As individuals, you can claim the Section 80 tax-saving deductions that are available to your salaried counterparts, and as freelancers, you can also claim the deductions available to business owners. You are eligible for deductions on taxsaving investments like ELSS, NPS and PPF under Section 80C, deduction on house rent under 80GG and so on. You can also claim tax-saving deductions on business expenses. Here’s how you can go about claiming these benefits: As a freelancer, you use computer systems, laptops, cameras and so on. As you use these assets their value depreciates. A small portion of the value of the asset can be claimed as a deduction from your taxable income every year. You have expenses like telephone bills, internet bills, office supplies to run the everyday work-related activities. You can claim these expenditures as deductions while filing your tax returns. If you have purchased a website domain to showcase or discuss your work, you can claim deductions on that too. Freelance work often involves meeting clients at coffee shops or restaurants to discuss work. If you pay the bill, you can claim deductions on the expense. You can also claim tax-saving deductions on travel expenses incurred to meet your clients, including deductions on fuel expenses for your own vehicle and the fare for hired cabs. If you rent a desk at a co-working space, you can claim deduction on the amount you pay. If you work from a home you rent, you can claim part of the rent amount. Do keep in mind that you will need to present all relevant documents and bills of the expenses that you wish to claim deductions on.