In today’s time, YouTube, Instagram and other social media platforms have become a major source of income for many people. People are now earning money through sponsored posts, affiliate marketing, fan support and other digital methods. But keep in mind, this income is not tax-free. In India, it is necessary to declare this type of income while filing ITR and it is also taxable.
In what ways is earning?
Content creators earn money in many ways, like.
- Ad earnings from YouTube or social media
- Brand promotion and sponsored posts
- commission from affiliate marketing
- Money received from fans (like membership, superchat)
- By selling merchandise or digital products
How is tax levied?
If you are earning by creating regular content, then it is considered as business or profession income. That means your total income will be taxed as per your tax slab. If this is just an occasional income, then in some cases it can also be considered as income from other sources.
Free gifts are also taxable
Influencers often receive gifts like phones, clothes or cosmetics from brands. If you keep them with you, their value can also be considered as your income. If the value of such gifts is more than Rs 20,000, the company can also deduct 10% TDS.
GST may also be imposed
If your annual income exceeds Rs 20 lakh, you will have to get GST registration. After this, about 18% GST will have to be imposed on brand deals and promotions.
How to fill ITR?
- Small creators can choose ITR-4 (Presumptive Scheme)
- Those earning more or maintaining complete accounts have to fill ITR-3.
What things should be kept in mind?
- Accurately display all types of earnings (ads, brand deals, gifts)
- Maintain invoices, payment proofs and agreements
- Keep records of expenses, such as camera, laptop, software (Canva, Adobe etc.)
- You can show these expenses as deduction in tax.
thing to understand
As easy as earning from social media seems, tax rules are equally important. Filling ITR correctly and following the rules can save you from future troubles.