Tax on those who influence social media: Tax on those who influence social media: Know the causes and rules in India – Social media has become very important and necessary for us.
- Influencer income is generally considered the earnings of a company that is subject to standard income taxes.
- If an influential person has a turnover of more than Rs 20 lakh in a financial year, he will have to register under the GST Act.
- For influential people living in a special category state, the turnover limit is Rs 10 lakh.
Social media has become very important and necessary for us. From communication to entertainment and shopping, this is our only solution for a variety of needs. The number of social media users has increased rapidly in the last 10 years. Already this number is 57% of the world population, this number is likely to increase further. Therefore, effective marketing has become an important aspect of a brand’s marketing strategy and is seen as an effective way to reach the target audience and increase awareness. Other things, including sponsorship and advertising money, can be appealing to those who make an impact on social media.
Tax and calculate those who influence social media
Social media influencers build a large number of followers by posting regularly on their favorite platforms such as YouTube, Instagram, Facebook and Snapchat. Influencers are taxed just like any other person or organization makes money. Influencers are categorized as self-employed individuals or as sole proprietors in a business or occupation, excluding companies and partnerships in terms of taxes.
The income is considered the earnings of the company
Influencer income is generally considered the earnings of a company that is subject to standard income taxes. But those who are subject to final taxes or are exempt from taxation under the existing rules are excluded from this scope. YouTube partner events, sponsored social and blog posts, displaying ads, becoming a brand representative or ambassador, affiliate marketing, co-creation project lines, promoting your own products, selling photos and videos, digital courses, subscriptions, e-books Any amount received from podcasts, and weblogs, etc., in financial form or any other form, all business income that will attract regular income tax.
So do it
Earnings of influencers are subject to income tax under the heading ‘Profit and Profit from Business and Business’. Earnings of individual influencers are taxed at existing slab rates. The accounts of influential persons earning more than Rs 1 crore in a financial year are audited on taxes. If more than 5% of all payments and more than 5% of all receipts are not in cash in that financial year, the maximum revenue for the audit will be Rs 10 crore. Payments made to influencers can attract tax deductions at source (TDS) under the Income Tax Act. The TDS rate will be determined by the nature of the service provided or by the type of transaction (tax slayer).
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What is the rule of gst?
Under the Goods and Services Tax (GST) Act, the services of YouTubers, influential and bloggers are classified as online information and database access or recovery services (OIDAR). Simply put, these services are considered to be services that use information technology to deliver data through the Internet or electronic networks. If an influential person has a turnover of more than Rs 20 lakh in a financial year, he will have to register under the GST Act. For influential people living in a special category state, the turnover limit is Rs 10 lakh. GST is levied at 18% on services provided by GST-registered social media influencers and bloggers.
What are the rules regarding export of services?
Central Tax (CGST) and State Tax (SGST) are levied at the rate of 9-9% depending on whether the supply is interstate or interstate. Or we can say that the Integrated Tax (IGST) is levied at 18%. Speaking of exports of services, the GST rate is 0%. Those who influence social media and want to export their services have two options. They can either export the service by providing a Letter of Undertaking (LUT) or pay IGST and then claim it as a refund. Google Inc. And the supply of ads placed on platforms like Google AdSense is zero-rate. As the recipients of these services are outside India, these platforms are widely used by influencers.
You can take advantage of this deduction
To reduce your taxable income, you can deduct business expenses from your income, which will reduce your tax payments. Possible examples of what can be deducted as a social media influencer include the cost of filming, such as cameras, microphones and other equipment; Membership and software license fees; Internet and communication costs; Home office expenses such as rent and utilities; Office supplies; Business expenses like travel or transportation expenses etc. Your expenses are tax-deductible if they are necessary for your employment as normal and effective.
(The author of the article is Ruchika Bhagat, MD of Neeraj Bhagat & Company Ruchika has been a member of Chartered Accountants of India since 1998.)
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