Tax on Twitter (X) Income: A Detailed Guide
- Nimisha Panda
- Jul 10
- 5 min read
Updated: Jul 13
After changing its name to X, Elon Musk's Twitter has begun paying content producers a portion of its ad revenue. Many people are using X (previously Twitter) to make money. Screenshots of funds credited to their bank accounts have been shared by those who are benefiting monetarily. The recipients of this type of income have been curious about taxes. Depending on the tax laws of the jurisdiction, taxing earnings from activities that entail receiving payment via tweets can be difficult. According to tax experts, social media revenues will be taxed regardless of whether you are a professional or a salaried individual, but the taxation process will differ for each user. In this article, we will give a detailed overview of tax applicable to income earned from Twitter (X).
Table of Contents
Taxation of Income of Content Creators on Twitter (X)
Musk just declared that X Premium (blue) subscribers are eligible to receive a portion of the company. Another significant statement regarding this microblogging social media site was made by the officials. Additionally, the subscribers would receive a piece of the revenue generated by the adverts. To be eligible for X's revenue-sharing scheme, content creators must have at least 500 followers and roughly 5 million organic impressions on their posts.
When is Tax Applicable to Twitter (X) Income
Twitter income is subject to indirect taxation in India if an individual's turnover surpasses Rs 20 lakh during a fiscal year. Direct taxation is triggered when an individual's total income goes beyond Rs 2.5 lakh if they opt for the old tax regime, and Rs 3 lakh if they opt for the new tax regime. A content provider is required to pay taxes if they get this sum from Twitter. However, these are some factors to bear in mind:
Influencers and content producers who work hard to produce material for X are required to classify their earnings from X as "business income" or "profits and gains from business or profession."
Any other individual who receives payment from X but whose posts are less regular or organized than those of professional artists would have their earnings classified as "other income."
How creators interact with the platform determines a lot. The requirement that individuals file Income Tax Returns (ITRs) for either of the aforementioned situations is a crucial consideration. In the two situations outlined above, the creator may request a deduction if they have incurred any costs during the content creation process. People are able to lower their marketing, travel, and content development subscription costs as a result.
It should be mentioned that if gross receipts for the financial year surpass the Rs. 50 lakh or Rs. 75 lakh threshold, section 44AB for audit is also applicable. The requirement that 95% of the receipts be made online applies to the enhanced maximum of Rs. 75 lakh. It is also possible to apply other pertinent parts of the Income Tax Act, such as section 44ADA. Every individual who makes money on Twitter, YouTube, Instagram, or any other social media platform is required to report their income source and total income for the year. They must also file their ITR for the relevant financial year by the tax deadline, which is July 31 in non-audit cases or October 31 in audit cases.
Calculation of Tax on Twitter (X) Income
The income from X will be computed using the content providers' income tax slab rates. As previously stated, taxpayers are also entitled to deductions if the income is classified as "business income" or "profits and gains from business and profession." If you are a content provider, you can use the following methods to determine the tax that will be applied to your earnings from X:
Step 1: Determine your "Total Income" by adding up all of your earnings from X and any additional sources that may be relevant.
Step 2: Take into account the "deductible expenses. Think about the costs associated with creating content for the social media network. Subtract the specified sum from your "total income."
Step 3: Determine the gross total income. It is the sum left over after subtracting your costs.
Step 4: Take into account the deductions. Take into account and deduct the relevant deductions under Sections 80C and 80D.
Step 5: You will receive your taxable income once you have completed all of the previously outlined stages.
Step 6: Verify the tax rate based on your income's income tax slab.
Step 7: Proceed with the tax computation. Multiply your taxable income by the tax rate applicable in your case.
Step 8: Verify if you qualify for tax credits or refunds. Take into account any tax breaks or credits. Your tax burden will decrease as a result.
Step 9: Add cess for education and health. Add a 4% health and education cess after deducting any relevant rebates.
Step 10: Determine the total amount of tax due. The total amount that must be paid in taxes is determined by adding the cess to the tax. Lastly, remember to confirm if TDS would be relevant.
Deductions from Twitter (X) Income
If the expenses are related to content production for X, content creators should consider the deductions they are eligible for:
Internet charges
Interest on loans taken out to purchase laptops, computers, and other devices
Computers, cameras, microphones, and other equipment depreciation
Administrative expenses, if any
Team members' salaries
Applicability of GST on Twitter (X)
Social media content producers need to keep in mind that they are required to register and file for GST if their income surpasses Rs 20 lakh in a fiscal year. Influencers' content production services are classified as Online Information and Database Access or Retrieval Services (OIDAR). There will be an 18% GST charge. According to tax experts, the authors' revenue from Twitter India or its international branches determines how much they are taxed under the GST. In the latter scenario, the revenue generated by creators would be seen as a service export. Despite this, content producers are still required to register for GST. Additionally, they must possess a current Letter of Undertaking (LoU).
Conclusion
In conclusion, X influencers and producers need to be aware of the tax laws governing earnings from producing social media material. Professionals' earnings would be classified as "Profits and Gains from Business and Profession." However, it would be considered "income from other sources" if salaried people received money from X. When filing an ITR, the specifics of such income must be stated explicitly.
Frequently Asked Questions
Q1. What is the income tax rate for earnings generated from social media?
Earnings from social media platforms are not subject to a particular income tax rate. Following the application of any applicable deductions, all such earnings will be subject to taxation at the rates of the relevant income tax slab. These earnings must be recorded under the correct income category.
Q2. How can salaried individuals report their income from Twitter in ITR?
Salaried individuals who get income from X must likewise disclose it on their ITR. According to the circumstances, they would have to list the information under the heading of "Profit and Gain from Business or Professional" or "Income from Other Source."
