Earning a fortune from Instagram and YouTube? Beware! Income Tax is also watching; learn how to file your ITR
Earnings from Instagram and YouTube are not tax-free. They must be reported in your Income Tax Return (ITR) and are taxed according to your tax slab. Brand deals, gifts, and affiliate income are also taxable.
Today, YouTube, Instagram, and other social media platforms have become a major source of income for many.
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, this type of income must be declared when filing your income tax return (ITR) and is taxable.
In what ways is earning done?
- Content creators earn money in many ways, such as.
- Ad revenue from YouTube or social media
- Brand promotion and sponsored posts
- commission from affiliate marketing
- Money from fans (e.g., memberships, SuperChats)
- By selling merchandise or digital products
How is tax levied?
If you earn money by creating regular content, it's considered business or professional income. This means your total earnings will be taxed according to your tax slab.
If it's just occasional income, it may also be considered income from other sources in some cases.
Free gifts are also taxable
Influencers often receive gifts from brands, such as phones, clothes, or cosmetics.
If you retain these gifts, their value can also be considered as income. If the value of such gifts exceeds ₹20,000, the company may also deduct 10% TDS.
GST may also be applicable.
If your annual income exceeds ₹20 lakh, you'll need to obtain GST registration. After this, approximately 18% GST will be levied on brand deals and promotions.
How to file ITR?
- Small creators can opt for ITR-4 (Presumptive Scheme)
- Those with higher income or maintaining complete accounts have to file ITR-3.
- What things should be kept in mind?
- Accurately display all revenue (ads, brand deals, gifts)
- Keep invoices, payment proofs, and agreements safe
- Keep records of expenses, such as camera, laptop, software (Canva, Adobe, etc.)
- You can show these expenses as tax deductions.
Thing to understand
As easy as earning money from social media may seem, tax rules are equally important. Filing your ITR correctly and following the rules can save you from future troubles.
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