YouTube bloggers, also known as “YouTubers,” are individuals or groups who create and upload video content to the YouTube platform. They may create a variety of content, such as vlogs, tutorials, reviews, and more. They earn money through a variety of methods, including advertising revenue, sponsored content, and merchandise sales. Advertisers pay to have their ads displayed on a YouTuber’s videos, and the YouTuber earns a share of that revenue. Sponsored content is when a company pays a YouTuber to create a video promoting their product or service. Some YouTubers also sell merchandise such as t-shirts, hats, and other items related to their channel.
”Income tax on Youtubers”
In India, YouTubers are considered self-employed individuals and their income from YouTube is considered as business income. The income tax for self-employed individuals is calculated based on the income tax slab rates for that financial year. As per the Indian Income Tax Act, 1961, the income tax slab rates are different for different age groups and income levels. They have to file their income tax returns on an annual basis and pay taxes on their YouTube income.
DTAA provision for Youtubers
It is important to note that YouTubers who are receiving income from foreign entities may have to pay taxes as per the Double Taxation Avoidance Agreement (DTAA) between India and that foreign country. The DTAA is a tax treaty signed between two countries to avoid double taxation of income earned in one country by a resident of the other country.
Youtubers to maintain Regular Books of Accounts
YouTubers are also required to maintain proper records and books of accounts of their income and expenses related to YouTube. They are required to file their income tax returns on an annual basis and pay taxes on their YouTube income.
It is important to maintain proper records and books of accounts of their income and expenses related to their business. The records should include all the transactions related to the business such as sales, purchases, expenses, and so on. It is important to maintain these records in order to claim deductions and exemptions while filing the income tax returns. It’s important to note that the records should be accurate, complete and up to date.
Expenses incurred can reduce the taxable income of Youtubers
Expenses incurred for the purpose of earning business income are allowed as a deduction from the business income.
Some of the common expenses that are allowed as deductions are:
- Rent paid for business premises
- Repairs and maintenance of business premises
- Salaries paid to employees
- Insurance premium paid for the business
- Cost of goods sold
- Depreciation on assets used for business
- Travel expenses for business purposes
- Communication expenses for business purposes
- Legal and professional fees incurred in relation to the business
- Interest on borrowed capital used for the business
It is important to note that the expenses incurred should be directly related to the business and should be supported by valid documents such as bills and vouchers. Additionally, the expenses should be incurred during the financial year for which the income tax return is being filed.
Tax Saving Schemes and benefits for Youtubers
In India, YouTubers, as self-employed individuals, are eligible for certain income tax benefits on the income generated through their YouTube channel. Some of the common income tax benefits for YouTubers in India are:
Deductions under Section 80C: YouTubers can claim deductions up to a maximum of 1.5 Lakhs under Section 80C of the Income Tax Act, 1961 for investments made in certain specified instruments such as Public Provident Fund (PPF), National Savings Certificate (NSC), Equity-Linked Saving Scheme (ELSS), and so on.
Deductions under Section 80D: YouTubers can claim deductions for the premium paid for a health insurance policy/mediclaim for themselves, their spouse, and dependent children.
Deductions under Section 80E: YouTubers can claim deductions for the interest paid on a loan taken for higher education for themselves, their spouse, and dependent children.
Deductions under Section 80GG: YouTubers can claim deductions for the rent paid for the residence if they do not have any other house in their name and do not receive HRA from their employer.
Depreciation: YouTubers can claim depreciation on the assets used for the purpose of their business such as computers, cameras, and other equipment.
Home office expense: YouTubers can claim deductions for the expenses incurred for the purpose of maintaining a home office such as electricity, internet, and so on.
Professional fees: YouTubers can claim deductions for the fees paid to professionals such as chartered accountants, tax consultants, and so on.
It’s important to note that these deductions are subject to certain conditions and limitations and it’s always advisable to consult a chartered accountant or a tax expert for the exact tax liability and compliance for the income earned from YouTube.
Income Tax Slab rates Applicable on Youtuber
In India, the income tax slab rates for the financial year 2022-2023 are as follows:
For individuals Youtubers below the age of 60:
- Up to INR 2.5 lakhs: No tax
- INR 2.5 lakhs to INR 5 lakhs: 5% tax
- INR 5 lakhs to INR 10 lakhs: 20% tax
- Above INR 10 lakhs: 30% tax
For individuals Youtubers aged 60 years or above but below 80 years:
- Up to INR 3 lakhs: No tax
- INR 3 lakhs to INR 5 lakhs: 5% tax
- INR 5 lakhs to INR 10 lakhs: 20% tax
- Above INR 10 lakhs: 30% tax
Income tax return filing due dates for individual Youtubers
Self-employed individuals such as Youtubers are required to file their income tax returns on an annual basis and pay taxes on their business income. The due date for filing income tax returns for self-employed individuals is July 31st of the following financial year.
Youtubers to pay Advance Tax
YouTubers are liable to pay advance tax in four installments where the income tax liabilities in a financial year are Rs. 10,000/- or more
In conclusion, YouTubers in India are eligible for various income tax benefits on the income generated through their YouTube channel, but these benefits are subject to certain conditions and limitations. It’s always advisable to consult a chartered accountant or a tax expert for the exact tax liability and compliance for the income earned from YouTube.
