Tax on social media influencers: Why do they have to pay tax and how is it calculated in India?
Social media has become inordinately important and essential to us. From communication to entertainment to shopping, it is the one-stop solution for our various needs. The number of people using social media has grown at an exponential rate over the last decade. They already account for 57% of the global population, and this number is likely to continue to rise. Hence, influencer marketing has become an important aspect of a brand's overall marketing strategy and is seen as an efficient way to reach out to a target audience and raise awareness. Sponsorships and ad money, among other things, can be lucrative for social media influencers.
Tax Implications on Social Media Influencers and its Calculation
Social media influencers generate a big number of followers by regularly posting on their preferred platforms, such as YouTube, Instagram, Facebook, and Snapchat. Influencers are taxed in the same manner as any other individual or organisation that earns money. Influencers, other than companies and partnerships, are classed as self-employed individuals, or persons engaged in trade or business as sole proprietors for tax purposes.
Influencer earnings are typically regarded as company earnings that are subject to standard income tax, with the exception of those that are subject to a final tax, or are excluded from taxation under existing rules. Any amount received, whether in monetary forms or others -- from YouTube partner programs, sponsored social and blog posts, display advertising, for becoming a brand representative or an ambassador, affiliate marketing, co-creating project lines, promoting own products, photo and visales, digital courses, subscriptions, e-books, podcasts, and weblogs -- are all examples of business income that are subject to regular income tax. With increase in the level of creativity, the above-mentioned forms of advertisements tend to transform.
Read more at: https://economictimes.indiatimes.com/news/how-to/tax-on-social-media-influencers-why-do-they-have-to-pay-tax-and-how-it-is-calculated-in-india/articleshow/86088511.cms