Tax on YouTube Income in India

YouTube, in recent years, has emerged as a significant source of income. This social media website has transformed from a video-sharing platform to a content-creation platform, opening a lucrative income option to all. Content creators are making money from this platform, but it is also important to understand the taxation of such income as per the Income Tax Act 1961. 

In this article, we will provide you with a comprehensive guide on the taxes applicable to your income from YouTube.

What is The Nature of YouTube Income?

The nature of the income of YouTubers varies as per the posts they make. 

Here are the various types of income earned by YouTubers - 

• YouTube advertisements
• Affiliate sales or freelance income from the content created
• Payment from YouTube for engaging viewers - assessed mainly as per the number of views, comments and reach
• Consultancy service for video design, creation, and optimisation, assisting to reach a big audience

Income Tax on YouTube Earnings

The income tax payable on your YouTube business can be classified under 'Income from Other Sources' or 'Income from Business and Profession'. However, in most cases, the earnings are regarded as professional income.  

If an individual is involved in full-time content creation on YouTube and earns their main income from it, the earnings will be classified as income from business or profession for tax purposes. Additionally, if the income from YouTube surpasses earnings from their primary source of income, it will also be considered business or professional income and taxed accordingly under the applicable business income tax rates.

The taxpayer can benefit from the provisions of presumptive taxation under Section 44ADA. If your gross total income surpasses Rs 50 Lakhs or Rs 75 lakhs, you have to undergo a tax audit according to section 44AB. The increased limits of Rs. 75 lakh is subject to a condition that 95% of the receipts must be through online modes.

Rate of Tax Applicable to YouTube Income?

The income earned from YouTube will be taxed at applicable slab rates in the hands of the taxpayer. 

Individuals earning income from YouTube are required to file their Income Tax Returns (ITR) annually and report their earnings. According to the Income Tax Act, any benefits or gifts received from brands exceeding ₹20,000 are subject to Tax Deducted at Source (TDS) under Section 194R.

How To Pay Tax on YouTube Income? 

Taxpayers earning income from YouTube should disclose and pay taxes on the same while filing their Income Tax Return (ITR). The due date to file an ITR (for non-audit cases) for FY 2024-25 (AY 2025-26) is 15th September 2025. Also, if the total tax liability exceeds Rs. 10,000 for the year, the taxpayer is liable to pay advance tax.  

The income earned through advertisements is considered business income and will be subject to GST @ 10% (9% CGST & 9% SGST). Content creators should register and obtain a valid GSTIN when their income crosses Rs. 20 lakh threshold. It is important to understand that income tax and GST are different taxes and not the same. 

The income of a minor content creator will be clubbed and taxed in the hands of the parent. However, if the income is earned through the personal skill of the minor, then it will not be clubbed with the income of the parent but will still be taxed individually.  

Deductions Allowed in Income From YouTube

Under the Income Tax Act, the rules for claiming deductions differ depending on whether the income is classified under "income from business/profession" or "income from other sources." If the income falls under "income from other sources," only those expenses that are directly and wholly incurred to earn that specific income are allowed as deductions.

In contrast, for income classified as business income, a broader range of expenses can be claimed. This includes both direct expenses related to income generation and other costs incurred for running the business.

For instance, the cost of setting up equipment to record a YouTube video or create an Instagram reel is considered a business expense and is deductible under both income heads. On the other hand, expenses like acquiring a blue tick on X (formerly Twitter) are not directly linked to income generation. As such, they do not qualify as deductible expenses under the head "income from other sources."

Final Words

Earning income from content creation and vlogging on YouTube can be rewarding. However, if you do not have a thorough knowledge of its taxability, you can face issues during tax assessment. Understanding the tax implications and seeking professional guidance can help YouTubers profitably navigate their earnings. 

Hence, whether you are a young content creator or an experienced YouTuber, tax knowledge will only help to manage your income effectively. It will also help in fulfilling your tax responsibility towards the country.