Reading Time: 2 minutes

Income tax on youtube income, With the rise of social media, the demand for content creators and bloggers is the highest ever and on the rise. The Youtube Videos /blogging profession is popular due to the platform it offers for expression and it is a very lucrative career now a days. The income earned by a blogger/youtube content creator is subject to tax provisions under the Income Tax Act.

There are multiple sources for bloggers/content creators to earn money from the blog. Some of them are:

• Advertisements – The most common source of income for a blogger/content creator is through advertisements. The blog/Youtube channel becomes a platform for promoting the products or services of a company. the most popular ad network Google AdSense provides good income to bloggers/content creators who make their ad spaces available for business, every time a reader clicks on the ads, the blogger/creator makes money.

• Affiliate Marketing– Here the blogger/Creator places links to products or services in the blog/youtube channel related to such products and services. If the reader clicks on the links and purchases the product or service, the blogger/creator earns money.

• Paid review – Companies can directly approach a popular blogger/content creator and request for a paid review. The blogger /creator publishes the review and earns money

• Others –SEO services, Content Services, freelancing. the other sources are Consultancy, Designing,

Nature of Blog, YouTube Revenue

Blogging/Creator includes content creation, editing, graphics, acting skills, and many other things so t that it can be classified as a “profession” and it may be covered under this section of income From Business/Profession
as per the Income Tax Act, the taxpayer must pay taxes on the income in the profit and loss account after taking into consideration the total revenue and the expenses and remit taxes on the net income.

Income Tax on YouTube Income Expenses Allowed

The income from blogging will be taxed as business income, and hence certain expenses are allowable. These expenses will be deducted from the total revenue, and only the income net of expenses will be taxed. The allowable expenses are:

• Domain and hosting expenses.
• Rent expense for studio/office.
• Utility expenses such as water and electricity, Internet telephone, etc.
• Employee salaries.
• Payments to freelance consultants.
• Convenience charges.
• Depreciation is also can reduce from the revenue to arrive at Net Income.
• Any other charges that are incurred for the purpose of earning revenue.

It is a must note that the allowable expenses must be done for earning the revenue. The expenses incurred must promote or facilitate revenue generation for the business. The taxpayer must hold the bills and receipts as valid proof of expenses incurred.

 

Also, Read How to Link Aadhaar to PAN?