According to official sources cited in a PTI article, the Income Tax Department has opened an investigation into a number of social media influencers and content producers on websites like YouTube and Instagram for suspected errors in disclosing their earnings.
Details on Tax authorities are looking into social media influencers
The investigation was started last week after the department looked into about ten YouTubers and other social media influencers, mostly new artists and actresses from Kerala.
These influencers and content creators were making sizable earnings, according to sources, but either failed to disclose them in their income tax returns (ITRs) or reported them as being less than they actually were. This was discovered as a result of data analytics research done by the department.
Their ignorance of tax regulations is partly to blame for this gap.
Due to their authority, expertise, position, or relationship with their followers, social media influencers and online content creators have the power to affect their audience’s purchasing decisions or thoughts about a good, service, brand, or experience.
The tax agency apparently treated the people searched in Kerala with the utmost cooperation during the process of gathering evidence and recording their statements, showing a non-adversarial stance. Additionally, letters have been sent to these people in order to determine their exact tax obligations.
In various regions of the nation, similar action has also been taken against additional social media celebrities. The department is currently looking into several celebrities’ social media habits as well.
The tax agency, according to reports, has learned vital information about these online influencers and content producers.
This includes information about their brand endorsements, paid and unpaid promotions, expenses incurred with different financial tools like debit and credit cards, and their business contracts with social media platforms like YouTube and Instagram, where they get paid based on certain engagement metrics.
Before conducting the searches and sending out notices, the tax authorities gathered pertinent information using the tax deducted at source (TDS) database. The income-tax department’s administrative body, the Central Board of Direct Taxes (CBDT), implemented new TDS rules on advantages obtained from a business or profession the previous year.
According to the regulations, anyone giving a resident privileges or perks worth more than Rs 20,000 in a year must deduct tax at source at a rate of 10%.
This analysis demonstrates how social media influencers and content producers are being examined more closely in terms of their revenue disclosure and tax compliance. In this quickly expanding industry, the tax department seeks to assure transparency and adherence to tax laws.
