In a bid to combat tax evasion, the Income Tax Department (ITD) has recently intensified its efforts to scrutinize social media influencers who have been constantly posting about overseas holidays and extravagant shopping sprees on various social platforms while allegedly evading or paying significantly low taxes.
As per media reports, the ITD has taken action by issuing notices to 15 such influencers across lifestyle, fashion and entertainment categories, demanding an explanation for their income sources and the reasons behind their failure to pay appropriate taxes on their earnings.
Reports also suggest that the ITD has been using data analytics techniques to identify influencers who may have been under-reporting their income. The department has urged these influencers to furnish comprehensive details regarding their income derived from brand endorsements, sponsored content, and other relevant sources. Moreover, they are also seeking a thorough breakdown of their expenses including details of travel, accommodation, and clothing.
Effective from April 1, 2023, a new tax has been implemented specifically targeting social media influencers in India. This tax applies to influencers who earn more than Rs. 2 lakhs per year. Under the new regulation, influencers are subject to a tax rate of 30 percent on their gross income.
However, influencers have the opportunity to claim deductions for specific expenses incurred in their line of work, including travel, accommodation, and equipment. It is important for influencers to familiarize themselves with these changes to ensure compliance with the updated tax regulations and accurately fulfill their tax obligations.