Freelancing income will be taxable under the head ‘Profits and Gains of Business and Profession.
Freelancers can deduct expenses they incurred to do the job from their income. This could be anything from office furniture to cab fares to visit clients. These expenses must be directly related to the job you are doing.
How should freelancers account for their income — when it is due or when it is actually received?
There are two types of accounting methods –
- Accrual Basis of Accounting (also called Mercantile Basis)
- Cash Basis of Accounting
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