Blog · Income year 1 July 2025 to 30 June 2026
Freelancer or consultant: how to put your income on the IT01
If clients pay you fees, your bank statements hold most of your tax return. You find the fees, subtract the costs of the work, and keep a record of each figure.
Find your fees
Each payment from a client into your account is gross income from your business. Add all of them for the income year, from 1 July to 30 June. Do not add these payments:
- Transfers between your own accounts.
- Loans.
- Refunds of money that you paid.
Subtract the costs of the work
You can subtract expenses that you had only to get your fees. Examples are supplies, the rent of an office, software and bank charges. You cannot subtract private expenses. If a part of a bill is private, subtract only the business part.
Source: the authority's notes for the return, Note 2.
Equipment for the business
A computer or a vehicle for the business is an asset, not an expense of one year. The return gives an annual allowance on the cost of the asset.
Tax that a client kept back
Some clients keep back tax at source from your fees. This tax counts against the tax for the year. Keep the certificate or statement that shows each amount.
Keep a record
For each figure on the return, keep the payments that make it and the rule that applies. If the authority has a question about your return, this record gives the answer.
Is a return necessary for you?
Yes, if the gross income from your business is more than Rs 2,000,000. Also yes, if your total net income is more than Rs 500,000. Other conditions also apply.
Source: s.112(1).
Questions people ask
Can a freelancer subtract the phone bill?
Only the part of the bill that is for the business. You cannot subtract private expenses.
Is a new laptop an expense?
No. A computer for the business is an asset. The return gives an annual allowance on its cost.
Which payments are not income?
Transfers between your own accounts, loans and refunds of money that you paid are not income.
Let IT01 AI do these steps
IT01 AI is an app for Mac, Windows and Linux. It reads your bank statements and your statement of emoluments on your computer, sorts each payment, and calculates the tax with each figure linked to the Act. One payment of Rs 4,990, and the licence has no end date.
This article explains the law as it stands on 3 October 2026. It is not tax advice.