Can Depreciation Be charged on shop?? please answer with reasons
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Answer:
As a freelancer, the equipment you use for your work are your assets. These could include computer systems, laptops, cameras, etc. As these assets are used, their value depreciates. A small portion of the value of the asset can be claimed as a deduction from your taxable income every year. Even the vehicle you use to commute for work is an asset that you can claim depreciation on. The rate and method of depreciation varies across assets.
Expenses incurred to run daily work-related activities are counted as overheads and can be claimed as deduction while filing tax returns. For instance, expenses like telephone bills, internet bills, office supplies, etc. are eligible for deduction. Besides, if you have purchased a website domain to showcase or discuss your work, you can claim deductions on that too.
Since, freelance work often involves meeting clients at coffee shops or restaurants to discuss work, you can claim deductions on the expense if you pay the bill. Freelancers 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, etc. Travelling expenses on outstation work trips can also be claimed.
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.
For certain projects, a freelancer may have to enlist the services of another person or firm, and quote the charges for the same in his fees for the project. Payments made on a contractual basis, are also deductible. In order to claim deduction on contracting costs, a freelancer will be required to present the relevant documents and bills of the expenses.