Question 1

Is your influencer income a profession or a business?

Accepted Answer

Content creation income is taxed as business/profession income at slab rate. The classification affects two things: presumptive taxation and TDS rate. If "profession" (Sec 58, Income-tax Act 2025 (old Sec 44ADA) eligible): Only if content creation falls under a notified profession. Freelance writers, performers, and artists are listed, but social media influencers specifically have not been notified. Most influencers file as business income (ITR-3 or ITR-4). TDS received: When an Indian brand pays you for a collaboration, they deduct TDS at 10% under Sec 393 (old Sec 194J; professional services) or 2% under Sec 393(1) Table Sl. No. 6(i) (old Sec 194C; advertising/marketing). This TDS appears in your Form 168 (old Form 26AS) and is credited against your tax liability. Books of accounts: If your income exceeds ₹1.5L in any of the 3 preceding years, you must maintain books under Rule 46 (old Rule 6F). Many influencers don't, creating risk in a notice scenario.

Question 2

GST for influencers: when you must register and what rate applies

Accepted Answer

Influencer services fall under SAC 998361 (Advertising Services) or SAC 999332 (Other personal cultural & recreational services). GST rate: 18%. Registration threshold: ₹20L turnover for services. Once you cross ₹20L in brand deals, sponsorships, and platform income in a financial year: mandatory GST registration. After registration, you must collect 18% GST on all invoices to Indian clients and file monthly returns. For brand deals: If you're GST-registered, your invoice to a brand = deal value + 18% GST. The brand can claim ITC on this GST. This is why brands prefer working with GST-registered creators. For YouTube AdSense and foreign brand deals: These are exports of service, 0% GST with a Letter of Undertaking (LUT). No GST charged on foreign income.

Question 3

Creator expense deductions: what you can claim as a business

Accepted Answer

As a creator with business income, you can deduct all expenses incurred wholly and exclusively for the purpose of business. This includes much more than most creators realise: Fully deductible: Camera, lighting, microphone equipment (depreciation). Editing software subscriptions (Adobe, Premiere Pro). Studio rent or home office proportionate rent. Internet and phone bills (proportionate business use). Travel for brand shoots. Makeup/clothing specifically for shoots. Employee/editor salary. Prop purchases used in content.

Question 4

Free products as income: when gifted merchandise becomes taxable

Accepted Answer

When a brand sends you a free product for review, a phone, a watch, a beauty product, the fair market value of that product is taxable as business income if you keep it after the review. CBDT clarified this in 2020. Specifically: Free samples retained after promotion = taxable perquisite. The brand is required to add this to your perquisite income and deduct TDS at 10%. Exception: If the product is returned to the brand after the review, it is not taxable, it was a loan. Many influencers have arrangements with brands to return high-value items (phones, laptops) after reviews specifically to avoid this tax. Practical impact: An influencer who gets ₹5L worth of products per year for reviews has ₹5L of taxable income, even if no cash changed hands.

AdSense, brand deals, free products. All of it, taxed right.

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Exporting? File LUT and charge 0% GST.

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AdSense, brand deals, free products. All of it, taxed right.