Do minor content creators and influencers need to pay taxes?

Social media is an ever-so-expansive flight with wings of global opportunities, enormous audiences, increasing resourcefulness, perceptiveness, and databases. The exposure to social media and its scalability is massive for Gen Z and generation Alpha.

People under 18 make incredible money from such platforms! Sponsored posts, YouTube partner programs, display advertising, e-books, listicles, brand representation, affiliate marketing, product promotions, photo and video sales, digital courses, subscriptions, and podcasts are a few financially thriving social media avenues to list a few.

The creative roles have begun to trace their structures, defined aspects, and the chain of discourses.

The sky is the limit!

The pertinent question to answer here is whether or not are the incomes of minor influencers, bloggers, and content creators taxable. Let us find out!

The income earned from social media is based on factors such as views, followers, subscribers, video engagement, channel niche, and traffic source. Any earnings obtained through these means are subject to taxation.

Let us dive into the following classifications to understand which minor income is taxable and which isn't:

1) Unearned income

It refers to the income from gifts, interests from savings accounts, etcetera, that are made in the child's name by parents. This income is combined with the parent's income and taxed accordingly. If both parents are working, the income gets combined with the parent with the higher income.

2) Earned income

It refers to the income from skills, talent, and personal work, such as earnings you make from being an Instagram or YouTube influencer. This type of income is taxed after all deductions get made.

3) Profit from Business or Profession

This concerns the income earned from social media platforms such as Instagram and YouTube by child influencers is taxable under this category, which includes any benefit or advantage arising from running a business or profession. The income is taxed after expenses are deducted and treated as business income.

Is GST applicable to the content creators and influencers under 18?

According to the Goods and Services Tax (GST) laws, the services provided by YouTubers, influencers, and bloggers are classified as Online Information and Database Access or Retrieval Services (OIDAR), meaning services that use technology to distribute data through the internet.

If an influencer's revenue exceeds Rs. 20 lakhs in a financial year, or Rs. 10 lakhs in a special category state, they are required to register under the GST laws. GST is imposed at a rate of 18% on services offered by GST-registered social media influencers and bloggers.

The myth that only those over 18 years of age can apply for a PAN card exists due to the requirement that taxpayers have one. However, the Income Tax department does not specify an age limit for applying for a PAN card, making it possible for minors to fill out their application for a PAN card.

A minor's income from investments or holdings is not taxable and gets combined with the parent's income, it becomes taxable under certain circumstances, and a PAN card is required:

1. If the minor is physically disabled or blind.

2. If they have earned income on their own.

3. If they have earned income through their skills, knowledge, and talent.

Please note that minor influencers can avail of a few deductions as well.

As a social media influencer, you can lower your tax payments by subtracting business expenses from your earnings to decrease your taxable income.

This may incorporate filming equipment, subscription fees, internet and communication costs, home office expenses, office supplies, and travel expenses. However, these deductions are only valid if they get deemed necessary and typical for your job as an influencer.

It is the day and age of exciting content creation! The sky is the limit, and age is not a limit. Keep creating, thriving, and outshining the limits, and trust TaxBuddy to walk you through all the tax compliances.

FAQs

Q1 Do influencers need GST?

In India, influencers earning over a specified threshold must register for Goods and Services Tax (GST). If your annual turnover exceeds the prescribed limit, currently set at Rs. 20 lakhs (Rs. 10 lakhs for special category states), GST registration becomes mandatory. This ensures compliance with tax regulations and legal obligations, providing a transparent framework for financial transactions.

Q2 What is the GST rate for influencers?

The GST rate for influencers in India is typically 18%. However, specific rates may vary based on the nature of the services provided. Influencers need to be aware of these rates to accurately calculate and fulfill their tax obligations.

Q3 Do YouTube content creators have to pay taxes?

Yes, YouTube content creators are subject to income tax regulations. Earnings from YouTube, including ad revenue, sponsorships, and other sources, are considered taxable income. Creators need to report their income and pay taxes accordingly. It's advisable for content creators to keep track of their earnings and expenses and seek professional advice to ensure compliance with tax laws and avoid any legal issues.