The millennial generation has substituted the way we humans used to work in the past. This generation loves working for themselves by acting independently.
With the quick adaptation of technology and social media, blogging has emerged as a prevalent occupation. Along with the fame and freedom, the blogging profession is also quite lucrative. Bloggers who gain popularity and create followers who love their work earn lakhs.
However, as with every income, income earned from blogging is also taxable under the Income Tax Act. We shall cover the taxability aspect of the income earned from blogging in this piece. But before we jump into the tax aspect, let us first understand what blogging means and the sources of income of a blogger.
Blogging means a website containing content related to the blogger’s knowledge, skill, expertise, life experiences, opinions or events of life, etc. With the advancement of social media and video technology, blogging has been upgraded to vlogging, a video format of the blog. In short, bloggers and vloggers are individuals who create and publish content on the website and social media platforms to engage with their viewers.
A blogger or vlogger can earn income through various sources like advertising a product or a brand by selling spaces on their website, promoting products or brands through affiliate marketing, and carrying out a freelancing activity for other brands, products or services, etc.
Since blogging involves many sources of income, the main reason for the income is the personal brand that the blogger or vlogger creates that attracts viewers and followers. Hence, it is right to classify the income as ‘Income from Business and Profession’ under the Income Tax Act. As it will be classified under business or profession, certain expenses will be allowed to be deducted from the revenue earned from the blogger’s income.
Mainly, the expenses directly related to the revenue generation of the blogging income will be allowed as a deduction. Expenses like domain name charges, salaries of employees or interns, payment to freelancing consultants, rent, electricity and phone bills, internet charges, depreciation of laptops, cameras, etc., which are directly related to the generation of the blogging or vlogging income, will be allowed as deduction.
Let us see an example of a vlogger to understand this better. Suppose Miss Aparna is a lifestyle blogger. She earns Rs.10 lakh per annum. Below is the list of expenses that she has incurred:
- Rent- Rs.1,00,000
- Internet expenses- Rs.12,000
- Other utility expenses- Rs.1,50,000
- Domain charges- Rs.25,000
- Freelancer consultants- Rs.50,000
- Depreciation on laptop and camera- Rs.80,000
All the expenses mentioned above are directly related to the income earned from blogging and hence will be allowed as a deduction from her annual revenue.
| Annual Revenue (a) | Rs.10,00,000 |
| Less- Expenses | |
| Rent | Rs.1,00,00 |
| Internet expenses | Rs.12,000 |
| Utility expenses | Rs.1,50,000 |
| Domain charges | Rs.25,000 |
| Freelancer charges | Rs.50,000 |
| Depreciation | Rs.80,000 |
| Total expenses (b) | Rs.4,17,000 |
| Net Taxable income (a-b) | Rs.5,83,000 |
Hence, Miss Aparna will have to pay taxes on net taxable income of Rs.5.83 lakh according to the income tax slab rate applicable.
Further, she can reduce her tax liability by investing in tax-saving investments like Equity Linked Savings Scheme (ELSS), Provident Fund (PPF), National Pension Scheme (NPS), repayment of the principal amount of home loan under Section 80C, a deduction for medical insurance premium under Section 80D, donation under Section 80G, etc.
Also, it should be noted that in case the income tax liability of the blogger is more than Rs.10,000 a year, then the blogger would be liable to pay advance tax in four instalments before the end of the financial year.
Along with this, the blogger will also be liable to pay Goods and Services Tax (GST), and Tax Deducted at Source (TDS) would also be applicable.
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For any clarifications/feedback on the topic, please contact the writer at jyoti.arora@cleartax.in
I am a Chartered Accountant by profession with 4+ years of experience in the finance domain. I consider myself as someone who yearns to explore the world through travelling & Reading. I believe, the knowledge & wisdom that reading gives has helped me shape my perspective towards life, career and relationships. I enjoy meeting new people & learning about their lives & backgrounds. My mantra is to find inspiration from everyday life & thrive to be better each day.
