The government has taken a big decision to tax the influencers earning from reels, brand promotion and content creation on social media. Now it will be mandatory to pay income tax on every like, view and brand deal earnings. For this, the Income Tax Department has implemented a new professional code 16021. After this rule, more than 300 content creators of Madhya Pradesh have come under the supervision of the Income Tax Department.
Now not just TDS, ITR will have to be filled
Until earlier, brands and companies used to cut TDS only on the payment of influencers. But now they will have to file income tax return (ITR). Tax experts say that there are about 2,000 active influencers in the state, which are earned millions and millions. According to CA Pankaj Sharma, this change in digital era was necessary so that the tax system could become transparent.
Entry will be done in ITR-3 and ITR-4 form
Under the new code, the influencers will have to enter their income in ITR-3 or ITR-4 form.
- If a creator wants to avail tax exemption under Section 44ADA, he will have to file ITR-4.
- Those with less than 50 lakh rupees will be taxed at 50% i.e. half income.
- Those who earn more than 50 lakh rupees will have to audit the full income and also pay tax.
Why this step was taken?
Till now, many content creators showed their income in another category, hiding the source of real income. Now the new professional code will know how much money has earned from social media. According to the data, there were about 1 million influencers in India in 2020, which increased to more than 40 lakhs by 2024.
MP and India’s Top Influenceer
Many influencers of Madhya Pradesh are becoming increasingly popular:
- Payal Dhare – 4 million followers
- Naman Deshmukh – 3.6 million
- Ritwik Dhanjani – 3 million
- Tanya Mittal – 2.8 million
At the same time, India’s top social media stars include – Bhuvan Bam, Cariminati, Ashish Chanchalani, Prajakta Koli, as well as big celebrities like Virat Kohli, Deepika Padukone, Shraddha Kapoor.
