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BLOGGING INCOME TAX AND GST APPLICABILITY

Today’s generation, also called millennials, love to work for themselves. They like to be accountable, responsible and independent. For the same reason, blogging has been gaining popularity for these young professionals.

In this digital age, this business can be very profitable as well as going to famous to you! Digital businessmen in India can earn millions every month. Yes, you read that, right! Millions! Blogging income is taxable under income tax law and should be considered when making career decisions.

To help you choose the information you need to know about the taxes on the income we receive from blogging

What is blogging?

The dictionary of blogging means ‘the experiences, opinions or events in the lives of the writers on the website. Recently, blogging has evolved into Vblogging in India with the help of YouTube, which is nothing more than a video format of a blog. So, it is Blogger's job to increase engagement and get visitors to publish content on their website on a regular basis.

A source of income from blogging

You may be wondering if I have a website, but how do I make money? How do I review my blog?

Your website is your primary business and there are two ways to make money. Listed below are some resources that bloggers can make money from –

• Sponsored Ads:

Once a blogger has created an identity and audience for themselves, interested brands pay them to support the products

• Affiliate Marketing:

Brands pay bloggers to promote their products or services. If a user buys a product or services through Blogger's website, Blogger receives a mutually agreed amount.

• Advertising:

Bloggers can sell space on their websites to advertisers to run ads. The process can be automated, where the highest bidder wins the place

• Freelancing:

Bloggers can also do various freelancing services in which they can collaborate with others and get paid for the project.

How to calculate tax on income from blogging

Since you need to pay tax on the income you get from blogging, you need to know that the income from blogging falls in the business/Profession category. According to the Income Tax Act, the taxpayers covered under this section are required to pay tax on the income earned except for some acceptable expenses

Coming to allowable expenses, yes, there are some expenses under this section that can help bloggers save money and the revenue received under acceptable expenses will be taxable. Expenses allowed paying tax on income earned through blogging-

-Domain hosting costs

-Employees'​salaries

-Payments to consultants independently

-Convenience charges

-Office Rent (if taken)

-Utility expenses like electricity, phone bills etc.

-Depreciation

As a blogger, you need to save receipts and bills for payments that are subject to acceptable costs.

These payments should be such that they will directly contribute to the business and income.

Let's take the example of a blogger named after Sachin. Sachin is a travel blogger whose total annual income including expenses is given below.

Source of Income          Annual Income

Travel blogging                       Rs.12,00,000.00

Now let us look at Sachin’s annual expenses – 

  Particulars               Money Spent (Annually)

  Rent                      1,00,000.00

  Utilty Exp                1,50,000.00

  Domain Hosting Charges     25,0000.00

  Payment to Freelance Consultant  40,000.00

  Depreciation                80,000.00

  Salary of two employees   3,60,000.00

  Total Expenses            7,55,000.00

      NET TAXABLE INCOME    4,45,000.00

For Sachin, the net taxable income is Rs. 4, 45,000. Sachin has to pay taxes according to his tax slab. After that, Sachin can make other investments in deductible mutual funds, PPFs, etc. under Section 80C of the Income Tax Act.

As a blogger, you need to pay advance tax (if you are applicable) which means you have to pay income tax in the same year you earn income. In addition, Blogger will be subject to taxes such as Goods and Services Tax (GST) and Tax deduction Source (TDS).

 FAQs

 Q1. Is it mandatory for Blogger to register under GST?

A1. If the total turnover of a blogger for a Financial Year is 20 lakhs or more, then he has to register himself for GST.

 Q 2. I have two separate websites. Do I need GST registration for both?

 A2. If both the websites are under the same name then you do not need separate GST registration. Both the websites can be listed under the same name while registering for GST

Q 3. Is it okay to transfer my Google Adsense money to my savings account?

A 3. Yes, there is no limit to the amount you can transfer from Google AdSense to your bank account. However, keep in mind that all these transactions should be mentioned while submitting your ITR

Question 4. I blog part-time. Do I need to share my secondary income while filing ITR?

 A4:- Yes, You should show all your income when filing an income tax return. The primary source of income, your salary will come under the heading ‘Income Salary’ and freelancing blogging money will come under the heading ‘Business / Business Income’.

Question 5. What happens if I don't show my blogging income when I pay taxes?

 A5. The income of blogging is taxable by law, but it is essential to pay tax for the income earned from blogging. The revenue from blogging comes under the heading 'Business / Business Revenue’. If you fail to pay your income tax on time, you will be penalized under Section 234 A/B/C.

Alliance Tax Expert is a platform for tax planning, income tax preparation and filing for individuals and businesses in India. We provide income tax, GST, income tax audit, accounting and scrutiny consultancy at nominal cost.

Contact

santoshpatil@alltaxfin.com

9769201316

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