Tax Rules for Instagram and YouTube Earnings in India

Last Updated on February 7, 2026

Social media content development in India has rapidly progressed from being a mere hobby to a full-fledged profession. People are building their own personal brands, influencing consumer behaviour, and making huge amounts of money through social media sites, YouTube, Instagram, Facebook, and upcoming short video sites.

Currently, content creators include lifestyle influencers, teachers, gamers, financial specialists, comedians, and content creators of regional languages. The digital landscape also enables the generation of revenue from advertisements, brand partnerships, affiliate marketing, membership, and selling digital products.

In the coming years, the scope for the creative economy in India is estimated to rise significantly as the number of people accessing the Internet and the number of smartphone users grow in the urban as well as the rural areas of the country. However, the increased opportunity for generating revenues has also created additional regulatory burdens, such as income tax, GST, advertising regulations, and contracts.

Taxation for Social Media Earnings in India

Revenue earned from social media platforms such as Instagram, YouTube, blogging, affiliate marketing, and influencer marketing is fully liable to taxation. The same is based on the type and scale of income earned.

1. Nature of Income

• Classified as income earned from a business/profession.
• Advertising revenue, sponsorships, paid promotions, affiliate income, brand retainers, and the sale of digital products are all included.
• One-time incomes may be taxed as “Income from Other Sources,” but continuous activities of this nature may qualify as income.

2. Income Tax Liability

• The individual income tax slab rates are adhered to, irrespective of the tax scheme opted for, i.e., old or new.
• It is mandatory to file the Income Tax Return (ITR-3/ ITR-4, if relevant).
• If your tax liability exceeds ₹10,000 annually, it is mandatory to pay advance tax in instalments.

3. TDS (Tax Deducted at Source)

• Brands can deduct TDS, typically at a flat rate of 10%, on payments made to influencers.
• Influencers can also be subject to TDS if they receive free products and bonuses above the specified amounts.
• It can be claimed as a part of an ITR.

4. Deductible Expenses

• Depreciation is relevant when purchasing equipment, including cameras, phones, and laptops.
• Under expenses fall internet charges, editing software, and marketing.
• Expenses also include professional fees, travel to shoots, and studio rental.
• These expenses reduce taxable profits.

5. GST Applicability

• In most states, a business with a turnover of more than ₹20 lakh in total must register for GST.
• There is an 18% tax that is imposed on influencer services.

Who is Covered under Social Media Earners?

Under the Income-tax Act of India, the income obtained directly or indirectly by a person from the creation, promotion, or monetisation of digital content on social media channels becomes taxable.

1. Through advertising, channel memberships, Super Chats, and even brand collaborations, YouTubers make money.
2. Through sponsorships, affiliate marketing, or a number of partnerships, Instagrammers make income.
3. On-site advertising, brand placements, and affiliate marketing help blog writers and website owners.
4. Sponsorship, subscriptions, or awards from the sites themselves can help podcasters and streamers to generate income.
5. Creators on Facebook, Snapchat, Moj, and ShareChat can use monetisation schemes.
6. Freelance digital marketers or social media managers generate revenue by preserving or producing online content.
7. In-kind exchange, free items, excursions, and/or presents could be offered to content creators by the organisations or people they are advocating.
8. Sellers of digital products on social media sites, including courses, settings, templates, and goods, are the said fans.

Tax Rules for Instagram and YouTube Earnings in India

1. What is “profits” for creators?

• Revenue from advertising on YouTube/AdSense, commercials, advertisements on YouTube Shorts, and membership fees.
• Collaborated on brand partnerships, sponsored posts, and paid collaborations on social media sites (Instagram, YouTube, reels, stories).
• Earnings from affiliate programs such as links, promotional codes, and marketplaces.
• Brands may also offer “gifts,” “complimentary products,” or “sponsored trips” as a way of “bartering
• Digital products sales such as courses, presets, e-books, merchandise, and events.

2. Income Tax: Taxation Overview (Income Category)

• The income generated by the creators is generally classified as “Business/Professional Income” and is not considered “salary” as the services are rendered to a brand/platform.
• Taxes are to be paid at your applicable slab rate (old regime/new regime) after deducting deductions. Sporadic creation of content might be seen as a business or profession, or it can be shown as Income from other sources, provided there isn’t a “business setup.” This is one of the common practices followed.

3. Section 194R (Benefits/Perquisites)

• If you are providing benefits or perks such as freebies, gadgets, or hotel stays, etc., amounting to more than Rs 20,000 in a single financial year, you may be required to deduct 10% of the amount as TDS before providing such benefits/perks.
• According to CBDT, in cases where you provide a product that gets returned after being used as a promotion, it may not be deemed as entertainment/other than ex gratia, but if the intention is to retain it as property, it is deemed as a perquisite.
• You are obliged to deduct TDS with regard to service charges based on the nature of the agreement, as specified in section 194J/ 194C/194H, etc.

4. Report full income

• If applicable, it is imperative that you disclose your total income despite the fact that TDS has been deducted.
• In order to claim your TDS credit, you need to declare your income in the Income Tax Return (ITR).
• It is advisable that you keep your invoice, agreement, statements, 26AS/AIS, barter system, etc.

5. Expenses that are generally allowed as claims, if related to business or profession

• Equipment: camera/phone/lighting, laptop, tripod, microphone, generally depreciated as capital.
• Internet access, software subscriptions, editing tools, and cloud storage services.
• Payments made to editors, designers, managers, and advertising consultants.
• Expenses incurred to shoot outdoors or at studios, including travelling and shoots related to the profession, props, studio rental charges, etc.
• A part of the home office expenditure, as applicable.
• Bank/payment gateway fees and professional expenses like CA/legal fees.

6. Presumptive taxation option – simplified bookkeeping

• Certain creators opt for presumptive taxation to ease the burden of compliance by declaring a fixed percentage of profit and paying tax on the same.
• Eligibility and sections thereof differ under 44AD vs 44ADA based on the nature of the activity.

7. Advance Tax (usually ignored by artists)

• If your overall tax due for the year exceeds TDS, you may have to pay advance taxes in instalments to avoid incurring interest, particularly during months when brand deals are high.
• GST Regulations for Instagram/YouTube Creators

8. When is GST registration applicable

If the turnover from services exceeds ₹20 Lakhs (lower in special category states), GST registration may be applicable based on the place of supply.

9. GST rates, invoices, GST, etc.

• Promoting a brand using influencer marketing is a service that attracts 18% GST if the business is registered.
• Once you are a taxpayer, you are mandated to raise invoices under GST, e-file returns, and claim input tax credit for business expenses.

10. The YouTube / AdSense perspective on ‘Export of Services’

The earnings from Google sites, which are associated with entities considered foreign, might be eligible for the zero-rated export of services, depending on various stipulations pertaining to GST.

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Frequently Asked Questions (FAQ)

1. Is income earned on Instagram/YouTube taxable?

Yes. Revenue from advertisements, brand partnerships, affiliate marketing, and sponsorships is considered taxable income in India.

2. What category does it fall under for tax purposes?

It is normally categorised as business or professional income when you fill out the income tax return (ITR).

3. What is the amount of tax owed?

The amount of tax depends on the overall yearly income and applicable slab rates, either new or old.

4. Is TDS deducted from the income of influencers?

Yes, brands are able to do so by deducting TDS, which normally amounts to 10%.

5. Are complementary products subject to tax?

But if the product is held, it may be subject to taxation if the value is above specific thresholds.

6. Is GST registration compulsory?

If your turnover is more than ₹20 lakh (for most states), you could be obliged to register under GST.

7. Can I deduct expenses?

Yes, deductions for equipment, internet, and other business-related expenditures such as editing and travel are allowed.

8. Do I have to pay advance tax?

If the amount of tax owed is substantial, the taxpayer might be required to make advance tax payments.