Earned money from X (Twitter), Instagram, YouTube or other social media sites? Know much income tax you will have to pay
Instagram, X (formerly known as Twitter) and others.
As most of these social media websites are based abroad, how will an individual who earns money from these websites get taxed?
How will earnings from social media be taxed as per income tax laws?
The income earned from social media sites such as X, Instagram, YouTube will be taxed depending on the head under which it is classified for an individual. It can be classified either under ‘Income from business and profession’ or ‘Income from other sources’.
“If the person receiving income from social media websites is entirely engaged in content creation on a whole-time basis and revenue earned from social media is the primary source of income, then it will be classified under profits and gains from business or profession and taxed accordingly. If the person is casually earning and it is not a substantial amount in comparison to his other incomes, then it is classified as income from other sources and taxed accordingly,” says Avinash Shekhar, CEO and Founder, TaxNodes, a tax filing platform.
“The level of activity as well as the quantum of income would be relevant to decide in which head income from social media will be taxed,” said Aarti Raote, Partner, Deloitte India, a business consultancy company.
“If the level of activity is irregular and the earnings generated from a tweet is a “one-off situation”, the income tax authorities might contend that the income should be categorised as income from other sources. The criteria for determining this classification will be influenced by the unique circumstances of each individual case,” says Neeraj Agarwala, Partner, Nangia Andersen India, a business consultancy company.
What is the income tax rate applicable for incomes earned
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