The income tax department does more than just review your tax return and financial statements. In actuality, they also peruse your social media posts. Furthermore, the income tax division may pick up on your social media posts as a possible sign of tax avoidance.
According to the information on the CA Club of India’s official website, the income tax department has sent notices to 15 social media influencers who posted about their luxury vacations and shopping trips while paying no income tax or very little income tax.
The income tax agency sent warnings to these 15 social media influencers and requested clarification from them regarding their sources of income tax and justifications for not paying it.
Why Did These Influencers Come Under The Radar?
According to reports, the income tax division is employing data analytics to review social media influencers’ accounts to look for any discrepancies between their social status and the ITRs that have been filed.
To determine if social media influencers are underreporting their income or not, they use data analytics. The 15 social media celebrities who received income tax warnings are from a variety of industries, including Bollywood, fashion, lifestyle, travel, etc.
The income tax division has requested information from the influencers regarding their earnings from sponsored material, brand endorsements, etc. in a notice. The income tax division has also requested information from these 15 taxpayers regarding money spent on travel, clothing and other items, lodging, etc.
Read More: ‘Murgi, ‘Machli’, ‘Chai’”: Finfluencers Create Code Words To Escape SEBI
Without divulging any names, an official has disclosed that three of these people had failed to file any results whereas others had grossly underreported their income. The official went on to add that 30 other such influencers across various social media platforms like YouTube, Instagram, and Twitter are under the radar.
A Mumbai-based influencer is known to have earned Rs 30 lakhs from a single brand (not including the luxury products which were given as gifts) but had only reported Rs 3.5 lakhs as her annual income.
The officials have also concluded searches on 10 YouTubers in Kerala, including one regional actor.
How Much Do Influencers Earn?
The social media influencer industry was valued at Rs 900 crore in 2021 according to The Influencer Marketing Report 2022, and is expected to reach Rs 2200 crore by 2025.
Industry sources say that influencers with 10,000-50,000 followers are paid between Rs 5000 and Rs 30000 for each sponsored post. The charges increase with an increase in the number of followers and celebrities can be paid up to Rs 1.5 lakhs per post.
How Much Tax Do They Have To Pay?
Influencers earning over Rs 20 lakh per annum are required to register their services under the goods and services tax law and are taxed 18% under GST.
From July 1, 2022, under section 194R of the Income Tax Act, 10% TDS needs to be deducted on freebies and perks worth over Rs 20,000 received for brand promotions. Officials claim that the said provision helped them track the income of social media influencers.
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Sources: Deccan Herald, The Economic Times, Business Standard
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