Income Tax on Blogging and youtube and google adsence in india

Income tax
Income tax on blogging

Income Tax on Blogging and Youtube and Google Adsence income in India.

YouTube video making, popularly regarded as vlogging has reached the top of its recognition by way of now. The vogue of googling for content material has shifted to you tube search. Many vloggers are making cash from YouTube. However, most of them are now not conscious of the tax implications. Let’s strive to discover this in detail. 

Why Income from YouTube is Taxed in India?

As per the Income-tax laws, if the earnings are acquired in India, it’s taxable in India. I am apparent that now you will be wondering why then TDS for this earnings in now not deducted. If you study via the AdSense contract entered between Google and Content creator in India, you will observe that the contracting google entity is Google Asia Pacific Pte. Ltd i.e. Singapore entity. 

It’s very necessary to recognize that when payment is made by a foreign company, the taxation regulations of that specific country along with DTAA provisions will keep good. Double Taxation Avoidance Agreement (DTAA) is signed between countries to keep away from taxing the same earnings in each the countries. As per Article 7 of the DTAA Agreement between India and Singapore, this earnings shall be taxed in the country in which the organization is present. i.e. India.

How is AdSense Income taxed under Income tax law?

The earnings from YouTube can be dealt with as:

  • Income from Business or Profession
  • Income from Other Sources

Let’s now try to recognize the above scenarios:

Income from Business or Profession

If vlogging, blogging etc. is your full-time or part time or essential supply of income, Then your  Income taxed under Business and Profession for taxation. You may additionally run your commercial enterprise as a Sole Proprietor, Partnership Firm, LLP, or Private Limited Company.

You will be taxed as sole proprietor until you register your commercial enterprise as a company, LLP, or Partnership. Here, you are efficiently strolling a commercial enterprise and you are eligible to deduct all the charges you incurred to make this income.

Let’s now try to recognize this with an example. Mr. Dhruv earns Rs. 30 lakh in the course of the FY 2019-20 with this type of source. He incurred the following expenditure to earn income.

1. Marketing Expense – Rs . 1,50,000

2. Advertisement Expense – Rs. 75,000

3. Travelling expenses- Rs. 7,50,000

4. Internet expenses- Rs. 18,000

5. Camera (Capital expenditure) – Rs. 4,50,000

6. Car (Capital expenditure) – Rs.9,00,000

Here, Mr. Dhruv needs to pay tax solely on the Net Profit made throughout the year. Since belongings like digital cameras and auto can be used over some time,some percentage of  depreciation can be claimed as expenditure as per income tax laws. However, the balance amount can be claimed as expenditure in the coming years.

The Net Profit made by Mr. Dhruv after the putting of the above expenditure is Rs.6,57,000. Tax needs to be computed at relevant rates.

If you are making a loss, you can carry forward this loss and set off towards future profits.

Note: To claim the expenditure, the enterprise has to keep perfect files bearing on to the same.

Alternatively, individuals / HUF / Resident Firms can make use of Presumptive taxation under section 44AD of the income tax act and declare 8% or 6% of gross receipts (as the receipt is via a digital medium) as Net Profit. Books of accounts need not be maintained if presumptive taxation has opted. This is, in reality, the great choice to save tax if your commercial enterprise makes a regular profit.


  • The benefit of this provision can’t be utilized if your gross receipt exceeds Rs.2 crores.
  • If you make a loss in any year and choose to file returns under normal provisions, then you can’t use this alternative for 5 years.

Not to forget, if your gross whole earnings exceed Rs 1 crore, you need to follow all bookkeeping necessities under Rule 6A and get your accounts audited by a Chartered Accountant(CA) under section 44AB of Income Tax Act,1961. However, if you are opting for 44AD presumptive taxation you are exempted from Audit under section 44AB. 


Income from Other Source

If Vlogging and blogging is your interest and you are profits are not huge, you might also choose to provide your earnings under Income from Other Source for taxation. It’s very frequent these days that humans begin Vlog to earn an extra source of income.

Let’s strive to recognize this with an example. Mr. Vishal is employed in XYZ Ltd and earns Rs. 40,000 Per month. He is interested in bikes and commenced a making video on youtube. He began uploading bike overview videos on weekends and made 1,00,000 for the duration of the FY 19-20. Mr. Vishal incurred a cost of Rs.30,000 attributable directly for making the videos (excluding capital expenditure). Here, he can exhibit Rs.4,80,000 under Income from salary and Rs. 70,000 from Income from Other Source while submitting the Income Tax Return (ITR). The tax shall be computed at relevant rates after considering allowable deductions.

Note: Capital expenditure can’t be claimed as expenditure under section 57 of the income tax act. Hence it’s usually advisable to offer the income under Income from Business and Profession if there is a capital expenditure like the purchase of Camera, Computer, etc. solely for this purpose. 

Is Advance Tax applicable for Adsence income ?

The advance tax shall be paid if the whole tab liability is Rs. 10,000 or greater in a financial year. Non payment of advance tax will attract Interest under section 234B and 234C.

Consequence of non payment of tax and not filing of Income Tax Return.

  • If you don’t pay tax, the profits earned will be regarded as illegal. This is concealing profits to evade tax. A penalty ranging from 100% to 300% of the tax evaded will be charged as per section 271(C)
  • A penalty of a minimum of 10% and a maximum of 90% of the undisclosed amount can be charged under section 271AAB based on circumstances.
  • If you don’t file the return on or before the due date, the rate of 1% will be charged every month, or phase of the month, on the amount of tax remaining unpaid as per section 234A.

If your whole profits from Adsense is less than Rs. 2.5 lac, then you are not required to file ITR.

Note : Its our opinion not a advise, consult your financial adviser or contact us.

thank you for reading this article.

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