If you file your tax return as a freelancer under the regular taxation scheme (using ITR-3 instead of the presumptive ITR-4), you are eligible to claim actual business expenses to reduce your taxable profits. For remote consultants and creative professionals, your home office is your primary business setup. Let's look at the expenses you can legally claim.

Laptop and Equipment Depreciation (The 40% Rule)

If you purchase a high-end laptop, computer, or printer for your work, you cannot write off the entire cost in a single financial year. Because it is a capital asset, you must capitalize it and claim a structured 40% Depreciation expense year-on-year in your ITR-3 schedules. This reduces your net taxable profits over time.

Proportional Rent and Electricity Deductions

If you operate out of a rented apartment and utilize a dedicated area exclusively as a home office, you can claim a proportional percentage (e.g., 20% to 30%) of your monthly rent and electricity bills as a legitimate business deduction. Keep copies of your lease agreement and utility bills as proof.

Other Claimable Expenses

You can also claim deductions for:

• Monthly internet bills and mobile connection charges
• Fees paid for co-working spaces and professional subscriptions
• Software licenses, hosting charges, and API keys
• Travel expenses incurred for meeting local or international clients