What
Is The Taxability Of Youtube Earnings?
Over the
last few year's , we all have observed that many people has comes to video
platform like youtube and making various videos related to education, fitness,
technical gadgets, gaming, review of movies/books etc. and uploading it in
youtube thereby making lakhs of money.
Generally youtuber earns money by getting views on
their videos. The more people give views on the video , the more money the
youtuber makes. Having said this, there are people (specially youtubers) who
are uncertain about their tax liability.
Let’s understand, How does the
income of youtuber be taxed?
First of all
remember that you will be taxed as sole proprietorship unless you registered
your business as a company, LLP or partnership firm. Tax provisions are
applicable as per the nature of income.
Nature of
income of youtuber is BUSINESS INCOME
and hence head of income will be PGBP. Gross income would be the total amount
of money received from youtube during the relevant assessment year.
If your gross turnover is below Rs 1 crore,
then you have to follow the normal tax provisions to calculate taxes and
maintain books of accounts.
If the
gross total income exceeds Rs 1 crore, then section 44AB i.e., Tax audit
will be applicable to the YouTuber. Tax Audit refers to the independent
verification of the books of accounts of the assessee to form an opinion on the
matters related to taxation compliances carried out by the assessee. Tax audit shall be conducted by a Chartered Accountant who
ensures that the taxpayers
has
maintained proper books of account and complied with the provisions of the
Income-tax Act.
But there is
one relaxation from getting your books of accounts audited by chartered
accountant(CA) only if you opt for presumptive taxation.
Presumptive
taxation for businesses is covered under section 44AD of the Income tax act
1961. Any business which has a turnover of less than Rs 2 crore can opt to be
taxed presumptively. They must declare profits of 8% for non-digital
transactions or 6% for digital transactions, whichever one is applicable. In your case it would be 6% only.
If it is the
only income you earn and your gross receipts from Youtube are less than Rs. 2
crores, you just need to pay tax on 6% (minimum, can be higher if you want to)
of the total receipts.
Tax = Total Receipts x
6%( minimum) x Tax rate applicable.
If the gross total income crossed 2 crores i.e more
than 2 crores then assessee has to compulsorily get its books of account
audited by the CA.
Don’t
forget to claim the below expenses
A) General Expenses: If you can submit the required
bills, expenses directly related to earning your income are fully deductible.
It includes your internet bill, costs incurred for computer or camera
maintenance and any other cost for creating and uploading the videos.
B) Other Expenses: Costs to promote and market your video
expenses.
C) Depreciation: Please remember that
the expenditure of assets cannot be deducted completely deducted against your
income. For instance, you can only claim 15 percent depreciation of the camera
price and 40 percent depreciation of the cost of the laptop/Desktop.
Compliances
procedure
In case you
have calculated your taxes under normal provisions and tax audit does not apply
i.e., your gross total income is less than Rs 1 crore, you will have to file
your income tax return by July 31 of the assessment year. For assesses who are
subject to tax audit, the return filing deadline is usually September 30 of the
assessment year.
Thanks for
reading!
CA Somay Garg
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