Filling Balance sheet in ITR4 for freelancers
"ITR-4 is for incorporated business. For freelancing, You can fill ITR 2 and declare the freelancing income as ""income from other source"". Refer to the Income Tax website for more details"
It's better to use the accounting equation concept: Asset + Expenses = Capital + Liabilities + Income If you purchase an asset: Suppose you purchased a laptop of $ 500, then its journal will be: If you sell the same Laptop for $ 500, then its entry will be: "Paypal linked with my bank account. 1.Can I use my Saving bank account to receive payments from my clients? Or is it necessary to open a current account? Yes you can get funds into your savings account. However it is advisable to keep a seperate account as it would help with your IT Returns. 2.I will be paying a certain % as commission on every sales to a couple of sales guys (who are not my employees but only working on   commission). Can I show this as an expense in my IT returns? As you are earning as freelancer, you are eligible for certain deductions like Phone calls, Laptop, other hardware, payments to partners. It is important that you maintain a book of records. An accountant for a small fee of Rs 5 K should be able to help you. In the Returns you have to show Net income after all these deductions, there is no place to enter expenses.   3.Since I will be receiving all the payments in Euros so am I falling under a category of ""Exporter of services""? The work you are doing can be Free Lancing.    4.Do I need an Import Export Code (IEC) for smoothly running this small business? You can run this without one as Free lancing. IEC would be when you grow big and are looking for various benefits under tax and pay different taxes and are incorporated as a company." I have a basic template for creating a balance sheet, cashflow statement and P&amp;L.   From here you can put in your assumptions, and expenses, then plug in your forecasted revenue (which you need to create on a separate spreadsheet. Would something like this help? "New York will want to you to pay taxes on income from ""New York sources"". I'm not sure what this means to a freelance web developer.  If your wife is doing freelance web development under the same business entity as she did in New York (ie. a New York sole proprietor, corporation, etc), you probably do need to file. From nonresident tax form manual: http://tax.ny.gov/pdf/2011/inc/it203i_2011.pdf If you were a nonresident of New York State, you are subject to New   York State tax on income you received from New York State sources in   2011. If you were a resident of New York State for only part of 2011, you are subject to New York State tax on all income you received while   you were a resident of the state and on income you received from New   York State sources while  you were a nonresident.  To compute the amount of tax due, use Form IT-203, Nonresident and   Part-Year Resident Income Tax Return. You will compute a base tax as   if you were a full-year  resident, then determine the percentage of   your income that is subject to New York State tax and the amount of   tax apportioned to New York State." "I heard today while listening to an accounting podcast that a balance sheet... can be used to determine if a company has enough money to pay its employees.  The ""money"" that you're looking at is specifically cash on the balance sheet. The cash flows document mentioned is just a more-finance-related document that explains how we ended at cash on the balance sheet.   ...even looking for a job This is critical, that i don't believe many people look at when searching for a job. Using the ratios listed below can (and many others), one can determine if the business they are applying for will be around in the next five years.   Can someone provide me a pair of examples (one good)? My favorite example of a high cash company is Nintendo. Rolling at 570 Billion USD IN CASH ALONE is astonishing. Using the ratios we can see how well they are doing.  Can someone provide me a pair of examples (one bad)? Tesla is a good example of the later on being cash poor.   Walk me though how to understand such a document? *Note: This question is highly complex and will take months of reading to fully comprehend the components that make up the financial statements. I would recommend that this question be posted completely separate." "Your own site/business. I’m in freelancing and internet business for 15 years, 20 years IT experience. Currently i use freelance websites for cheap Asian employees, very seldom for EU/USA employees, and if only if local competition is heavily out-pricing qualified staff. Till I went ""limited"" i.e., founded a limited corporation I was jobbing as freelancer and sole proprietor, both with limited success due to the strong Asian competition i myself currently hire. The point where freelancing got ""not sustainable"" as primary income was 2006 for me, don’t want to get into detail but every freelancer who was active back then knows what I mean, it was like whole India got internet. If you have absolutely no references, do it for the references a limited time and see the fee you pay as service for you to get references, then start your own web identity, either as freelancer or as corporation. Make sure you take your very satisfied customers with you. Every ""very satisfied"" customer in your contact list means 10 new customers which mean 2 new customers which mean 0.2 new customers and so on. Honestly, this info is solely based on experience of this niche fro ma European citizen perspective, if you’re based anywhere else the situation might be totally different." Stop with all the stupid big words. You sound really pretentious. Just learn your 3 statements from accounting coach and learn statement analysis from streetofwalls.  If you're interested into valuation, streetofwalls is a good primer for DCF/public comps/M&amp;A comps/scenario analysis (LBO), but if you want to literally build out the model, Joshua Rosenbaum's investment banking valuation book is great. Everyone in banking I know used it to learn valuation Company Income Tax Filling |GST Registration and Migration Sujata Associate ia an accounting Firm and we are expertise in Companies Act 2013 and we help in Company Registration, Private Limited Registration , Limited Laiblity   Registration , Public Limited Company Registration , Partnership Company Registration and Propriotrship Company Registration. Sujata Associates also help in Company   Audit ,Maintaince of Company Accounts ,Sale Tax Return Filling and Income Tax Filling. Since you are living in India and earning income not from salary, you must file your tax return under ITR4(Profits or Gains of Business or Profession). You can do it online on IncomeTax India eFiling website, step by step guide available here. What you're looking for is the 'Transaction Report'. When you're looking at the report (it comes up empty), open the options and click on the first tab 'Accounts'.  Here you can highlight multiple source accounts in the top pane, and filter by the Expense accounts that you are interested in the bottom pane. Here's an example that goes over the process (there are many examples online, I just included the first one that came up in a search). Sounds like a trick question.  If it's hired for a limited time, equivalent to an operating lease, then you only pay a running cost as it's used, and it's neither an asset or a liability, but just a running cost like salaries.  If it's hired in a way that fulfils the criteria for a financial lease, i.e. you treat it like it's being purchased, then it's both a liability and an asset. It goes on both sides of the balance sheet. Just like when you buy something on credit and recognize the liability to pay as a debt, and the item owned as an asset.  edit: presuming the relevant company is the one paying. You will be categorized as self employed. Will I have to register myself as a company or can go on unregistered and work You can register a company or can use an umbrella company or work as a sole trader. Remember as a sole trader you are legally responsible for you company's activities, an if a company sues you for your work he can take compensation from your personal assets. As a company your liability ends with the company, if your company is sued. Your personal assets are outside the purview of the lawsuit, but the court can attach that also but those are rare. This doesn't matter if you use an umbrella company. If you intend to be doing this for a short time(maybe a year or so), go for an umbrella company. Else register a company. will take you 5 minutes to form one. Depending on your earning you might need to register for VAT too. A comprehensive guide for self employed on HMRC. what would i need to be sound in uk and to be fit to work online as a freelancer? The same as above. Will it include paying any tax or paying any insurance Yes you have register for National Insurance(NI), before you can pay yourself a salary. The benefit of a company is you pay yourself a minimum salary, below the limit above which you have to contribute for NI, and take the rest as dividends. And pay no tax on it, till you don't exceed the limits. When the money comes in my account, will i be accountable to government of uk, to tell the source of income? If you are operating through a company, yes you would need to show your income(including source) and expenditure when you do your annual returns. What should i be knowing, like health insurance and things that are necessities in uk for a freelancer ? No health insurance as NHS exists. You can take out health insurance if you don't want to get into queues in NHS. What I would prefer is top open a new category charges under dispute and park the amount there. It can be made as an account as well in place of a income or expenses category. This way your account will reconcile and also you will be able to track the disputes. Work under UK umbrella company.  By this you are thinking of creating a new legal entity in UK, then its not a very great idea. There will be lot of paperwork, additional taxes in UK and not much benefit.  Ask UK company to remit money to Indian savings bank account   Ask UK company to remit money to Indian business bank account Both are same from tax point of view. Opening a business bank account needs some more paper work and can be avoided.  Note as an independent contractor you are still liable to pay taxes in India. Please pay periodically and in advance and do not wait till year end. You can claim some benefits as work related expenses [for example a laptop / mobile purchase, certain other expenses] and reduce from the total income the UK company is paying "I did sort of the same thing as you after a some time in consulting. The biggest annoyance for me was how poorly I thought the most basic, obvious bullshit through. Figure out how you'll bill for travel -- when do you fly vs. drive, what's your mileage rate, etc. Get your proposal template looking razor sharp, and have a standardized invoice ready (don't say ""net 30"" or 45 or whatever, some clients won't understand what you're talking about and there's no way to explain it without sounding like a douche). Be prepared to negotiate heavily at first. Until you start to get a steady client base, people are going to lowball you, perhaps rightfully so. Consider the consequences of establishing yourself at a low rate, or being considered unreasonable and inflexible.   Also, since you're working with a partner, figure out how you're going to register your business by considering your financial situations or, preferably, hiring an accountant. I also *strongly* recommend working with your partner and an attorney to draft an operating agreement. I've seen so many horror stories with people who either didn't have one, made their own shitty one, or otherwise got screwed on technicalities."