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Tax guide for YouTube bloggers: Here’s how to determine your income tax liabilities

by Loknath Das

The recent years have witnessed the emergence of a new profession—video blogging—more popularly called as vlogging. YouTube is its main medium. Many of you might be ardent followers of such YouTubers who give quirky life lessons, offer fashion tips, review books or movies or just repost clips from popular movies among others. India can now boast of its own YouTube stars with millions of subscribers.

Several budding vloggers, who make a mint by uploading popular videos (ideated by self or from credited sources), are uncertain about their tax implications. Let us explore this in detail. Before getting into tax rules for YouTubers, it is important to determine the source of income of such vloggers.

Nature of income of YouTubers

One aspect that attracts entrepreneurial minds to vlogging is that there are no age constraints and everything you make will be owned by you. It doesn’t require a lot of investment. Many YouTubers have started with uploading videos shot on their mobile phones. Many even keep their regular jobs until they get a breakthrough. Here are the kinds of income made by YouTubers.

-Payment from YouTube for audience engagement (assessed based on the number of reach, views and comments)
-YouTube advertisements
-Consultancy services on video making, designing and optimisation

-Affiliate sales or other freelance income from YouTube

Tax Implications for Income from YouTube

You will be taxed as a sole proprietor unless you register your business as a company, LLP or Partnership Company. Tax provisions applicability depends on the source and nature of income. Here, a YouTuber’s income is considered as business income.

Being a service sector business, the assesses can only opt for normal provisions under the Income Tax Act,1961. If the gross total income exceeds Rs 1 crore, then section 44AB i.e., tax audit will be applicable to the YouTuber. Additionally, Tax Deducted at Source(TDS) provisions will also be applicable to you on every receipt of payment. You can view your TDS amount through 26AS, which can be generated electronically.

If your gross turnover is below Rs 1 crore, then you have to follow the normal tax provisions to calculate taxes and maintain books of accounts. But if your gross total income exceeds Rs 1 crore, you must follow all bookkeeping requirements under Rule 6A and get your accounts audited by a Chartered Accountant(CA) under section 44AB of Income Tax Act,1961. You will have to pay taxes on the net taxable income after considering all the business expenses and depreciation as per the income tax slab applicable to you.

You may also have to pay advance tax if your total tax liability is more than Rs 10,000 in a financial year. You have to pay advance tax in four instalments given your tax liability is more than Rs 10,000 in a financial y year (FY).

Starting from June 15 , 15 percent of the advance tax has to be paid. Then by September 15, you should have paid 45 percent, by December,  75 percent of the advance tax liability and by March 15, 100 percent of it.

You have to pay your advance tax liabilities by the due date after considering the amount of TDS that has been already deducted from payments made to you. This TDS can be cross-checked from Form 26AS.

Don’t forget to claim the below expenses

a. General Expenses: If you can submit the required bills, expenses directly related to earning your income are fully deductible. It includes your internet bill, costs incurred for computer or camera maintenance and any other cost for creating and uploading the videos.

b. Other Expenses: Costs to promote and market your video expenses.

c. Depreciation: Please remember that the expenditure of assets cannot be deducted completely deducted against your income. For instance, you can only claim 15 percent depreciation of the camera price and 60 percent depreciation of the cost of the laptop.

In case you have calculated your taxes under normal provisions and tax audit does not apply i.e., your gross total income is less than Rs 1 crore, you will have to file your income tax return by July 31 of the assessment year. For assesses who are subject to tax audit, the return filing deadline is usually September 30 of the assessment year.




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