The recent generation has been inclined towards a completely new area of profession where people follow their hobbies to make their own lives rather than going for conventional jobs. One such job is video blogging i.e. Vlogging.
DISTINCTION OF INCOMES FROM VLOGGER
YouTubers are people who create their videos in specific areas such as education, tech, fashion, influencers, comedy, etc. Their major income comprises:
- On the basis of their audience engagements
- Brand or events promotions
- Affiliate or merchandise sales
- Freelance incomes etc.
TAXABILITY OF YOUTUBER'S INCOME UNDER INCOME TAX
The income of a YouTuber can be taxed under Income from Business and Profession or as Income from Other Sources. If you are pursuing YouTube as your full time income and your source of livelihood depends upon it, you will be taxed as Income from Business and profession. If it’s a part time job and earning is also comparatively lower, the income will be taxed under Income from other sources Additionally, TDS will also be applicable on every receipt of payment, the YouTuber receives.
TAXABILITY OF YOUTUBERS INCOME UNDER GST
YouTubers supply services by posting videos and contents on their channel with monetization, advertisements and brand promotions. Therefore, YouTubers and vloggers are considered to be the supplier of the Online Information and Database Access or Retrieval Services (OIDAR) Under GST laws. If the income of the YouTuber exceeds Rs. 20 Lakhs (10 Lakhs in case of special category states) will have to pay GST on supply of these services @18% (9% CGST and 9% SGST).
They can also opt for the composition scheme if their income does not exceed 50 lacs.
These returns should be filed in GSTR 1 or GSTR - 3B.
APPLICABILITY OF TAX AUDIT
YouTubers earning a gross income of more than Rs. 1 crores are liable to get their books of accounts audited by a practicing Chartered Accountant (PCA). However, the limit has been increased to Rs. 1 crores if not more than 5% of aggregate income is received through cash in that financial year.
U.S. TAX WITHHOLDS
According to the recent amendments in chapter 3 of U.S. Internal Revenue codes the chapter that YouTube will preemptively withhold taxes from any creator in YouTube Partners programs who earns money through U.S.. Every creator has to send their tax information by May 31, 2021 so as to determine the amount of withholding of tax. However, if the creator fails to furnish the required information on time, YouTube will deduct 24% of worldwide on total income and not only on U.S. based earnings.
Authored by Adv Shivam Kumar
CAclubindia
