Influencers and Creators, Take Note: New Tax Filing Rules Apply

New Delhi (The Uttam Hindu): This tax season, there has been an important change in filing returns for social media content creators and influencers. The income of social media content creators and influencers has now been placed in a special category.

The Income Tax Department has introduced a new code called '16021' under the Income Tax Return (ITR) Utilities for FY 2024-25 (Assessment Year 2025-26) for influencers who earn through promotions, product endorsements or digital content creation.

This code can be accessed under the 'Profession' category in both ITR-3 and ITR-4 (Sugam). This makes compliance easier for creators, online coaches and bloggers.

Now, influencers will have to choose either ITR-3 or ITR-4 (Sugam) depending on their level of income and option of presumptive taxation. This is a simplified scheme, which allows professionals to declare a certain percentage of their receipts as income and avoid maintaining detailed books.

According to experts, if an influencer is opting for presumptive taxation under section 44ADA, he should use ITR-4. This applies to professionals with gross receipts up to Rs 50 lakh and income up to Rs 75 lakh if their cash receipts are less than 5 per cent of gross receipts.

He said that for those earning from business income, Section 44AD allows a presumptive rate of 8 per cent (6 per cent for digital payments) on cash receipts up to Rs 2 to 3 crore, with tax on cash receipts less than 5 per cent.

ITR-3 form is for individuals and Hindu Undivided Families having business or professional income (including remuneration received from partnership firm). Income from salary, residential property, capital gains and other sources can be declared under ITR-3.

However, only individuals and HUFs with business and professional income will be eligible. If the income falls under ITR-1, ITR-2, or ITR-4, ITR-3 cannot be used.

ITR-4 is for individuals, HUFs and partnership firms (resident in India) who opt for the presumptive taxation scheme under section 44AD, 44ADA or 44AE.

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