YouTube is the biggest digital content creation platform in the world. This social media platform is the king of all content creation platforms available worldwide.
Millions of brands and individuals worldwide dedicate their wealth of time and resources to accomplishing their financial and corporate dreams.
Various factors, including the COVID-19 Pandemic, have multiplied the number of brands and individuals nesting their eggs, resources, and time to bring their corporate and financial dreams to life through YouTube.
The platform receives 467 million views from India every hour. India is the biggest content consumer in the world on this video platform.
India has developed a massive community of content creators making money from YouTube. Even Indian brands leverage YouTube’s potential to reach their target audience beyond geographical boundaries.
Countless Indians are making money through YouTube. Many of them earn millions every year. This innovative career and business growth trend caught the attention of India’s Central Government and Taxation Department.
Even the IRS (Internal Revenue System), a revenue service for the United States Federal Government, has noticed it.
All Indians have to pay a certain amount of tax on their income from YouTube.
This post is to guide you about it.
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Indian Tax Rules For YouTubers:
The Central Government of India taxes the income of Indian YouTubers under the following two circumstances:
- According to the head of profits and gains from business and profession.
- According to the slab rates in force for individual influencers.
What happens if your annual total gross income exceeds the threshold of ten million in Indian rupees?
According to the Income Tax Act, 1961, the Income Tax Department of India will audit your account books according to section 44AB.
The Central Government of India has increased this threshold limit to 100 million Indian rupees.
This condition is applicable only if the aggregate of every cash payment you receive throughout a financial year does not exceed the limit of 5%.
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Tax Deducted At Source (TDS)
Under the Income Tax Act, 1961, a YouTuber and influencer may have to pay TDS on every receipt of payment. The rate of TDS applicable will depend on the following:
- The nature of the service provided.
- The nature of financial transactions you enter into
You can download form 26AS to check your amount of tax dedicated at the source.
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Do This If Your Gross Turnover Is Below Rs. 1 Crore
You should act wise and comply with normal tax provisions for the following:
- Calculation of taxes.
- Maintenance of accounting books.
Do This If Your Gross Turnover Is More Than Rs. 1 Crore?
Act wise! Do the following:
Make sure you fulfill all bookkeeping requirements according to Rule 6A.
Hire an experienced and certified CA (Chartered Accounts) under section 44AB of the Income Tax Act, 1961, to get your accounts audited.
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What About Goods And Services Tax?
Do YouTubers have to pay this tax?
“Yes” is the only answer to this million-dollar question.
All services offered by YouTubers fall in the category of OIDAR (Online Information and Database Access or Retrieval) under Goods And Services Tax (GST), India.
You must get yourself registered under GST If…
- You are a YouTuber or an influencer making more than 2 million (INR) in a financial year.
- You are a YouTuber or an influencer living in a special category state, and you are making more than 1 million (INR) in a financial year.
- If you are a YouTuber or an influencer providing services to a registered recipient in a different state. In this scenario, registration is mandatory for you. Your total turnover does not matter.
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Percentage of GST Applicable On Your Income From YouTube
Two different types of GST and rates apply to YouTubers’ income. For example:
- 9% CGST (Central Goods And Services Tax)
- 9% SGST (State Goods And Services Tax)
This makes a total of 18% IGST (Integrated Goods Services Tax).
9% CGST is applicable according to the rules of the Central Government of India.
Your state government also charges 9% SGST (State Goods And Services Tax).
This means that YouTubers and influencers in India pay 18% GST on their income.
Again, it depends on the category of the knowledge or service supply:
- Intrastate
- Interstate
Do You Export Your Services?
You may have to pay 0% GST for this. In this case, you will have the following two options to export your services:
- Furnish a letter of undertaking (LUT).
- Furnish a letter of undertaking (LUT).
IGST can be claimed back as a refund later.
Google Inc. and Google Adsense are not located in India, and the supplies are zero-rated. These are services that most YouTubers in the world use.
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Do Vloggers Need To Pay Tax?
Vloggers are also obliged to net taxable income after the following:
- Consideration of all business-related expenses.
- Consideration of depreciation according to the income tax slab.
- Considering all the business expenses and depreciation as per the income tax slab.
Vloggers can claim three expenses while filing an ITR (Income Tax Return).
Expenses about earnings and income are deductible. The list includes the following:
- Internet bills
- The cost of the computer’s purchase and maintenance.
- The cost of camera maintenance and purchase.
- The cost of content creation and uploading.
The income tax law of India allows YouTubers to claim 40% depreciation on the camera and 15% on the car as an expense.
The government may allow you to claim the balance amount as an expenditure in the future.
Do you vlog or run your YouTube channel as a hobby instead of a profession or business? In this case, you opt to offer your income under IFOS (Income From Other Source) for tax, if your earnings are not huge.
This is not the end of the knowledge all Indian YouTubers need about the concept. You do know more. The list includes the following:
- Tax requirements to make money from YouTube.
- YouTube Tax/Accounting for Influencers in India.
- Why do Indian YouTubers have to pay taxes on their income?
- Bookkeeping tips for YouTubers.
- What is the importance of Bookkeeping in the success of your YouTube channel?
- Tax Deduction opportunities for YouTubers in India.
- Top Accounting tips for Indian YouTubers.
- Top tax filing tips for YouTubers in India.
- The best tax guide Indian YouTube bloggers need.
- Ways to determine your taxation liabilities in India.
You will learn about it through our future articles related to the concept. We suggest you keep coming back here. You will get the hang of these concepts.
The most important thing you will get is the full bang of the time you will spend learning about it.
Keep coming back here.
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FAQs
YouTubers Pay SGST (State Goods Services Tax), and CGST (Central Goods Services Tax). They have to pay 9% SGST and 9% CGST.
Yes! YouTubers or YouTube influencers Pay a 9% State Goods and Services Tax and a 9% Central Goods and Services Tax. In other words, this tax can also be filed as 18% IGST (Integrated Goods And Services Tax)
YouTubers pay 0%GST on the export of services in India. This could be possible through the Export of Service Under The Cover of A Bond or Furnished letter of undertaking (LUT).
Yes! Three things make YouTube Vloggers’ income taxable in India. First, business-related expenses. Second, consideration of depreciation as per the income tax slab. Third, consideration of every business expense and depreciation according to the income tax slab.
Various expenses about earning and income for Indian YouTubers are deductible. The list includes Internet bills, the amount of money spent on purchasing, a computer and camera, and the amount of money spent on the maintenance of the computer and camera. Even the cost of content creation and uploading also falls into this category.
Indian YouTubers are allowed to claim the 40% depreciation on the expense of a car and 15% depreciation on a camera.
All Indian YouTubers must register for a GST number if their income exceeds 2 million INR in a financial year. Do so if you are a YouTuber or an influencer living in a special category state, and your income exceeds the amount of 1 million INR in a financial year. What is more important is that your total turnover does not matter if you are a YouTuber or an influencer exporting services to a registered recipient of some other state.
Yes! An Indian YouTuber Or influencer Has To Pay TDS under the Income Tax Act, of 1961. The amount of percentage of TDS is determined according to the nature of service you provide and the nature of financial transactions you enter into. The amount of tax deducted at source can check through form 26AS.
Indian YouTubers Or influencers Have To Pay TDS if their annual gross turnover is below 1 Crore INR. You will have to pay TDS even if your income exceeds the amount of 1 Crore INR.
Calculation of taxes and maintenance of accounting books under rule 6A, and hiring a CA under section 44AB of the Income Tax Act, 1961 is mandatory for account audit.
Tax rules for YouTubers in India value the head of profits and gains from business and profession. The slab rates in force for individual influencers are also taken into account. This is how your YouTube income becomes taxable in India.
The Income Tax Act, of 1961 comes into play in this situation. The Income Tax Department of India audits your account books as per section 44AB.