Income tax news: How my YouTube earnings are taxed?
1 min read 25 Jul 2023, 10:27 AM ISTIf your YouTube channel is your main source of income or earns you substantial income, it will be treated as business income and taxed accordingly. If it is just a spare time activity with minimal income, it can be taxed under 'income from other sources'
PremiumI have a YouTube channel. I got earnings from it due to advertisements. Does it fall under income from business or profession? Which one is applicable 44 AD and 44 ADA? Also, I have a salary income of two months in this FY 22-23. Which ITR form is applicable to me?
The answer to your question would depend on the level to which you are conducting the activity on YouTube. If this is your sole activity for earning your main income or it earns you substantial income, the same would be treated as business income and would be taxed under the “Profits and Gains of Business or Profession" head.
In case this is just your spare time activity and results in not substantial income relatively the same can be taxed under the head “income from other sources.
So in case the same falls under the head “Profits and Gains of Business or Profession", we need to examine whether this would be treated as business or profession and which would depend on what type of videos you are uploading. If the contents of the video which you are uploading require you to have technical expertise for which special training is required, the same would be treated as a profession otherwise the same can be treated as your business income, and provisions of section 44AD would apply.
You need to discharge your tax liability by way of advance tax in case your tax liability in respect of such income exceeds Rs. 10,000/-. If the liability is less than this amount you can pay the taxes in respect of this income as self-assessment while filing your income tax return.
You need to file form No ITR 4 in case you opt to treat this as business income or form no ITR 1 or ITR 2 depending on whether you have more than one house property or income taxable under the head capital gains.
Moreover, you can file ITR 4S if you want to avail the benefit of presumptive tax under Section 44AD or 44 ADA provided you do not have more than one house property. Please note all professions do not eligible for a presumptive scheme of taxation under 44ADA.
Balwant Jain is a tax and investments expert and can be reached at jainbalwant@gmail.com and @jainbalwant his Twitter handle.
