According to several reports, the Income Tax department has reportedly given letters to social media influencers for paying zero or “substantially low” tax while receiving large and big sums from companies whose products they marketed via their social media posts.
The Income Tax department investigated social media influencers after they posted about their travel to exotic locations and expensive purchasing on social media networks.
If you make money using social media networks, keep in mind that you must disclose your earnings and submit your taxes. In reality, money earned in foreign countries is one of the requirements for submitting reports, even if the yearly income is less than Rs 2.5 lakh.
According to the reports, the social media influencer industry was worth Rs 900 crore in 2021 and is expected to reach Rs 2,200 crore by 2025, according to the Influencer Marketing article 2022.
Influencers who make more than Rs 20 lakh in a fiscal year are obliged by law to register their services as Online Information and Database Access or Retrieval Services (OIDAR). Services are taxed at 18% under GST.
If you have been a social media content influencer, you may have received a variety of sorts of revenue into your bank or remittance account. You might earn money for marketing, subscription and workshop fees, and merchandise commissions. Some receivables can also be in the form of gifts or items for evaluation.
The Income Tax department has begun levying a 10% tax deduction at source (TDS) on promotional gifts and benefits worth more than Rs 20,000.