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Business Standard

Earning from reels or brand deals? Here's how influencers must file ITR

From choreographed reels to brand shoutouts, India's growing tribe of digital influencers is turning social content into serious income. But as the money flows in from YouTube AdSense, affiliate links, Instagram collaborations and freebies, so does the tax department's scrutiny. With digital footprints becoming increasingly trackable, creators can no longer afford to ignore the tax implications of their online hustle. 'All income from reels, brand deals, affiliate links, and even barter collaborations, if total gifts exceed ~50,000 in a year, must be reported under 'business and professional income' in your ITR,' said Sudhir Kaushik, co-founder and chief executive officer of TaxSpanner. 'Even free gadgets or hotel stays count as taxable perks.' What you must report Unlike salaried employees, influencers are treated as self-employed professionals or business owners under tax laws. According to Ankit Jain, partner at a law firm, Ved Jain and Associates, 'Income from brand promotions, affiliate commissions, online workshops, event appearances, merchandise sales, or even foreign payments must be reported. Under Section 194R, brands offering free items worth over ~20,000 must deduct 10 per cent TDS on fair market value, this applies even if the influencer receives no cash.' Pallav Pradyumn Narang, partner at CNK & Associates LLP, an all-service firm, echoed this. 'Everything received in exchange for content, whether in cash, kind, crypto, or vouchers, falls under the taxable head of 'Income from Business or Profession',' Narang said. Deductions that lighten the tax load Influencers can reduce their taxable income by claiming relevant expenses. 'Costs like studio rent, internet bills, software tools, camera gear, or travel for brand shoots are deductible if used for business,' said Shefali Mundra, chartered accountant and tax expert at ClearTax. 'Even salaries paid to video editors or assistants can be claimed. For high-value items like laptops or lighting equipment, only depreciation is allowed under Section 32,' Mundra said. Jain recommended that creators 'maintain a separate business bank account to avoid mixing personal and professional expenses. This simplifies accounting and strengthens your defence in case of scrutiny.' ITR-3 or ITR-4? Choose wisely Not all influencers qualify for the presumptive taxation route. 'If your work involves skills listed under Section 44AA, like technical consultancy or film artistry, and your gross receipts are under ~75 lakh, you may opt for presumptive tax and file ITR-4,' explained Kaushik. 'Otherwise, you'll need to use ITR-3 and maintain proper books.' Savani added that content creators can choose between the old and new tax regimes based on which offers better deductions. Skip the guesswork -- be fully compliant Under-reporting income or choosing the wrong ITR form can backfire. 'AIS and Form 26AS already reflect what brands, platforms, and banks report to the tax department,' said Savani. 'Even minor mismatches can trigger notices, audits, and penalties up to 200 per cent of the tax due.' Mundra further warned that failing to pay advance tax can attract interest under Sections 234B and 234C. 'Foreign earnings, GST on sponsored posts, and high-value freebies are under the scanner. Don't wait for a notice, file cleanly and smartly.' Final word Being an influencer may feel fun and free-spirited, but when it comes to taxes, it's serious business. From the first brand deal to the last swipe-up link, every rupee (or ring light) counts. The Income Tax Department is watching your follower count and your Form 26AS, so file right, stay compliant, and keep creating without worry.