These days you just need to have skills and interest and there are opportunities galore to earn your living. And for regular income earners, this has come as a good source of secondary income from platforms such as Instagram, Facebook, Youtube. And if you too have some income source from such platforms, it needs it mention in the ITR and there is tax outgo beyond some specified limits.
Classification of Income earned via different social media platforms
Interestingly, such income from blogging precisely cannot be classified into the five income heads as per the Income Tax Act. But is invariably charged to business or professional income and is charged accordingly.
How to show such earnings from social media platform in ITR?
Now the classification of such an income is known to us and besides the regular income, the net earnings from social media also need to be shown in the ITR. And if the quantum of income through such source is huge i.e. above Rs. 50 crore as above in net annual turnover then towards the end of the financial year, their tax audit is also to be done. And when making this net income declaration from social media platforms, you need to deduct annual expenses.
"Income from social media falls under the purview of service sector and hence the income tax audit becomes mandatory if one's net annual turnover is Rs 50 lakh or above. However, it doesn't mean one needs to pay income tax on Rs 50 lakh. One's expenses have to be deducted while calculating the net income from the social media. For example, one needs to go for the internet expenses, private video and photo shoot, social media experts for getting more traction on one's social media account, etc. These are some common expenses that one must deduct from the annual turnover during the ITR filing", said another SEBI registered tax and investment expert Manikaran Singhal explaining the rules for the same.