Social media creators generally earn income through different platforms. A YouTuber may earn through AdSense, while an Instagram creator could receive money from brand collaborations.
Affiliate commissions, memberships, Super Chats, platform incentives and merchandise sales can add to the earnings.
While these may appear to be several small revenue streams, the Income Tax Department generally considers them taxable income that must be properly reported.
With the 31 August income tax return deadline approaching, creators who earn regularly through social media should ensure that their income and expenses are properly recorded. For FY 2025-26, the 31 August deadline applies to taxpayers with business or professional income whose accounts are not required to be audited.
The expanding creator economy has also blurred the distinction between a hobby and a profession. A person uploading videos after office hours may initially earn only a modest amount. However, if content creation becomes a regular activity and an important source of earnings, the income is generally treated as profits and gains from business or profession.
This can include YouTube advertising revenue, Instagram brand deals, affiliate income, fan contributions, memberships, Super Chats, merchandise sales and digital products. The tax liability is calculated according to the applicable income tax provisions and slab rates.
This is where creators can potentially make mistakes. They may record a large payment received from a brand but overlook a smaller affiliate commission, a platform payout received at a different time or even products received from a company that could have tax implications.
A creator may have four or five separate sources of income in a single month, ranging from AdSense and brand collaborations to affiliate links and platform payouts.
The challenge, therefore, is not simply earning money but maintaining an accurate record of every payment. Since different platforms follow different payment cycles and formats, it can be easy to overlook an income stream while preparing the ITR.
The 31 August deadline is especially relevant for individuals earning business or professional income who are not required to get their accounts audited.
Maintaining proper books and tracking earnings regularly can do more than reduce the possibility of tax-related problems. It can also create reliable financial records that may prove useful when dealing with brands, applying for loans or approaching potential investors.
Which is the right ITR form?
The appropriate ITR form depends on the nature and structure of a creator’s income.
Eligible taxpayers with business or professional income may be able to use ITR-4 under the presumptive taxation scheme, provided they meet the applicable conditions. Others may have to file ITR-3. According to the Income Tax Department, ITR-3 applies to individuals and HUFs earning income from business or profession who are not eligible to use ITR-1, ITR-2 or ITR-4.
Certain eligible creators may also opt for presumptive taxation under Section 44AD. Under the scheme, eligible businesses can generally declare 6% of eligible digital receipts as presumptive income, subject to the applicable conditions and rules.
Creators should not simply follow the tax treatment adopted by another influencer. The correct ITR and tax treatment depend on factors such as the nature of income, business structure and eligibility under the relevant provisions.
TDS and GST obligations
Income tax is not the only compliance matter creators need to consider. Depending on their earnings and the nature of services provided, GST and TDS requirements may also apply.
GST registration generally becomes applicable when aggregate annual turnover exceeds ₹20 lakh, while a lower ₹10 lakh threshold applies in certain special category states. Separate provisions may also apply when services are provided to overseas clients.
TDS is another area creators should watch. Payments received from brands for professional services can attract TDS once the prescribed threshold is crossed. Free products, benefits or other perquisites received from brands may also have tax implications under Section 194R, subject to the applicable conditions.
Radhika Goyal is Author of Taxconcept Gurugram head office, for deeply reported tax, gst and income tax articles on issues that matter. He splits her time between New Delhi and Bengaluru, and has worked as a reporter, a podcaster and an editor for publications across India.