NewDelhi: YouTube has emerged as a primary revenue-generating platform for thousands of creators in India, with several of them making hundreds of thousands of rupees each month from their channels. Although the platform provides thrilling financial chances, many creators do not know that apart from the other good benefits their income is under Indian law. If you’re one of the people earning money on YouTube, here is what you need to know about how much tax you are liable to pay and the compliance standards you should meet.
Income Tax Rules for YouTube Revenue
The type of tax applied to YouTube revenue is determined based on the classification of income under the Income Tax Act, 1961. YouTube income generally falls into either ”Income from Other Sources” or ”Income from Business or Profession.” However, in most cases, it’s classified as business income, which means it’s subject to business-specific rules.
Income Under ₹1 Crore
If in case your annual income from YouTube is below ₹1 crore, you have to file taxes under the standard income tax rates. You are required to keep financial records for your income, but a tax audit is not an obligation to do so.
Income Over ₹1 Crore
For YouTube content creators whose annual earnings surpass ₹1 crore, the situation becomes a bit more complicated. A tax audit is required according to Section 44AB of the Income Tax Act. This indicates that you will need to hire a qualify Chartered Accountant to perform an audit on your accounts prior to your tax return filing. The net taxable income is estimated after the deduction of business expenses and depreciation.
GST Applicability on YouTube Income
Apart from the income tax, creators who earn from YouTube should also comply with the Goods and Services Tax (GST) directives. Advertisement revenue attained through YouTube is liable for 18% GST – evenly divided as 9% CGST (Central GST) and 9% SGST (State GST). YouTubers exceeding the GST threshold must register for GST and file the returns as per requirement.
Why Compliance is Essential
Slips on digital and online incomes are serious matters, thus, the noncompliance with tax laws can lead to penalties and other consequences related to the law. Keeping a log of your revenues, maintaining accurate records and submitting returns on time is not only vital to your tax obligations but, also significant for establishing your name as a reliable professional creator.
Concluding Remarks
The boom of YouTube as a favored destination for Indian content creators has brought the need for creators to understand the tax obligations. Whether your channel is just for fun or you consider it a serious business, being on the right side of the law will save you from the hurdles of the day after. The producers with high revenue should consult the financial professionals to be sure all requirements are met regarding the Indian tax laws.
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