Tax Filing for Professionals with Side Business as YouTube and Affiliate Marketing

Sources of income

1. YouTube Ad Revenue - 4 lakhs per annum

• Income is always received in USD and converted into INR by banks.

2. Affiliate Marketing - 40 lakhs per annum

• Product is purchased from subscribers of d/f countries - India, UK, USA, etc.
• Product's company is registered in USA
• Income is always received in USD and converted into INR by banks.

3. Income from Sponsors - 8 lakhs per annum

• USA and UK based companies pay a fee for sponsoring their products in YouTube videos.
• Income is always received in USD and converted into INR by banks.

4. Total Income = 4+40+8 = 52 lakhs per annum

5. This income goes into 3 family members so each gets around 17.3 lakhs per annum which is < 20 lakhs

6. Each family member file their taxes independently under section 44 ADA

7. One family member (say X) also has a professional job with 40 lakhs per annum salary

• His Business Income is additional 17.3 lakhs
• His Investment / FD / Saving Interest is around 3 lakhs.
• Under section 44 ADA, profit is around 50% of 17.3 = 8.65 lakhs
• Net Income for this family member becomes 40 + 8.65 + 3 = 51.65 lakhs which is more than 50 lakhs benchmark.

QUESTIONS

Q1. What would be the right way for this person X to file taxes? Does the person X need to file GST registration?

Q2. Is it fine to run business as group of independent family members who file their taxes independently?

Q3. Is it fine for family members to use section 44 ADA (profits are shown as 50% of annual revenue) when they file taxes?

Q4. Do we need GST registration? Each family member has net revenue < 20 lakh right now.

Q5. If business grows, each member will earn > 20 lakhs, so what would be the best decision?

1. Should each family member register for GST and continue to file taxes independently using section 44 ADA?
   1. Benefit here is that we still have section 44 ADA which helps with tax savings and the headache of maintaining book reports isn't there.
2. If we need to register a business and do GST registration once, can we still use section 44 ADA?
   1. If we cannot use section 44 ADA, isn't this a really expensive option from tax implication side?
   2. How to save taxes in this case?
3. Since all incomes come from USD, this is "export of services" and that is exempted from GST.
   1. So if we pay 18% taxes, how do we claim that back?
   2. When do we pay that 18% gst - is it like advance tax?
   3. Do we need to quarterly file GST reports?

Please share if there are better ways of handling the taxes.