Taxes are an essential aspect of an economy. Blogging is a freelance job or a self-employed profession. Hence, there are several taxation laws related to it. Bloggers have different taxes, as blogging is also a job and helps earn income in India. It is a hobby for many people, but as it generates revenue, it must be taxed. One must distinguish it as an excellent business to get the tax benefits from blogging.
Blogging is a hobby and a good source of income for one’s living. It started in the late 2000s and gained a lot of attention in the 2010s. Millions worldwide write blogs, earn income, and live a good lifestyle. Most people only write it as a hobby and don’t make a living through it.
Whereas, as some people earn through blogging, it is considered an income source and is taxable. To experience the different tax benefits of blogging, one needs to distinguish one’s blogging as a legitimate business. This business must be profitable and must produce a regular revenue for one’s living.
Now the question arises: are bloggers eligible for tax deductions? The answer to this question is ‘yes.’ Bloggers can get tax deductions based on their income, revenue streams, records, and bills. If the blogs help an individual earn consistently, they will be considered for taxation purposes.
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The Different Tax Deductions
Bloggers earn through many income streams like affiliate marketing, Google AdSense, sponsored ads, and many other ways. And they can deduct their taxes based on many different facts. The following is brief information about how a blogger can deduct taxes in different ways: –
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Start-up costs
The start-up deduction of a blogging business will apply only for the first year. The one-time expenses needed to start a blog are referred to as start-up costs, and one can save taxes with the help of it. The incorporating cost is considered under the start-up costs, and hence one can avail of tax benefits on it.
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Expenses related to content
One can also deduct taxes with the help of the content that one provides. One can deduct taxes if the blog is related to travel or cooking. For example, if the blog is made regarding cooking, one can deduct the cost of the food ingredients with the help of the taxation process, which is demonstrated in the video or the article.
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Hosting and website expenses
Once the blog website is ready, there will be certain expenses. Maintaining the website needs web hosting, which involves a lot of money. Also, an individual can pay specific fees to the service providers to improve and maintain the blog’s quality. These expenses will also be deductible.
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Marketing costs
Bloggers usually spend money marketing their blogs, known as marketing costs. Many bloggers use email marketing strategies to help their content reach readers via email. These expenses and similar expenses related to promoting a blog are also tax-deductible.
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The Home Office
A home office needs to run one’s blog and grow the business. The home office tax deduction is an important one for many bloggers. There are specific norms related to home office tax deductions. The office must be exclusively for business purposes only. It cannot be a corner in the room. Also, the room must not be treated as a guestroom too. These deductions are for renters as well as house owners.
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Paying the Contractors
Most bloggers use contractors from outside to make the blog work smoothly. For example, one uses freelancer writers to write the content for the blog as per the needs. As the blog grows with time, one needs more people to work on it. Hence, this also includes paying those people for their work. Therefore, one can deduct the expense paid to the contractors and the other freelance writers.
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Equipment Related to Computers
One needs a computer, laptop, or other computer devices to run one’s blog work smoothly and quickly. This equipment is necessary for a blogger. Also, the cost of this equipment is tax-deductible. The heavy computer equipment must be depreciated over several years. And, the small equipment like the mouse, keyboard, etc., can be expensed easily. Hence, one can claim tax benefits with equipment as well.
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Travel Expenses
If a person is a travel blogger, one can deduct the cost of the different travel-related expenses. This only includes the transportation and accommodation expenses related to the subject of the blog’s content. The travel-related fees must be in proportion to the earned income. Spending more than your income tax can lead to severe actions and penalties. The blogger must not get carried away with these expenses.
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Products and online services purchased for blogging purposes
The different online services or products purchased for the blog’s purpose are tax-deductible. This can include some technology gears, courses, or buying some equipment. For example, if an individual purchases software to detect grammar and dictation errors, it can be considered tax-deductible.
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Memberships and business-related conferences’ fees
One may attend some meetings to learn more about blogging or can get a membership to know about it. This will need some money and can be more significant in some cases. But, not to worry, this amount is also deductible under the taxes. If an individual needs to travel somewhere, that amount is also tax deductible.
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Cost of some other necessary equipment: –
One needs much other equipment for blogging, such as a camera, microphone, and other similar items based on your blog’s niche. These items can be tax-deducible if one uses this equipment for blogging purposes. If the equipment is not primarily used for blogging, it cannot be considered tax-deductible.
Depreciation
Like any business, bloggers also purchase assets essential for their work, such as laptops, furniture, and office equipment. The full cost of these assets cannot be claimed in the year of purchase. Instead, the cost must be spread over the asset’s useful life. This spreading of the asset’s cost over its useful life is called depreciation. Depreciation is an allowable expense, meaning bloggers can deduct it from their revenue to calculate their net income.
Investments
Bloggers can save on taxes by investing their earnings in specified avenues such as mutual funds, LIC policies, and PPF. These investments are deductible under Section 80C of the Income Tax Act. The deduction for these specified investments is allowable up to the limits set in the Income Tax Act.
Illustration
Consider Mr. Rishi, a blogger who earns Rs. 10,00,000 annually from his blogging activities. Here’s a breakdown of his profit and loss statement:
| Particulars | Amount (Rs) |
| Income from blogging | 10,00,000 |
| Expenses | (5,80,000) |
| – Domain Hosting | 20,000 |
| – Employee Salary | 60,000 |
| – Rent | 1,20,000 |
| – Utility payments (electricity, telephone, etc.) | 1,80,000 |
| – Depreciation on assets (40% of Rs 5,00,000) | 2,00,000 |
| Net Taxable Income | 4,20,000 |
Mr. Rishi can reduce his taxable income by investing in specified avenues eligible for deductions under Section 80C of the Income Tax Act. He will then pay taxes on the remaining amount according to the slab rates.
Additional Points:
- Income tax must be paid for the income earned in the current year. If the tax exceeds certain limits, it must be paid in instalments known as Advance Tax.
- Advance Tax payments must be made by the due dates.
- Mr. Rishi needs to file his income tax return within the specified timeframe and either pay any remaining tax or claim a refund.
- Delays in tax payments will result in penalties and interest charges.
- A Permanent Account Number (PAN) is required to file income tax returns.
- Tax provisions for blogging income are similar to those for business income.
If Mr. Rishi receives additional income beyond blogging, relevant provisions of the Income Tax Act will apply. He may also be subject to other taxes such as Goods and Services Tax (GST), Tax Deducted at Source (TDS), and Equalisation Levy.
Conclusion
Hence, it is clear that bloggers are eligible for tax deductions: https://www.incometax.gov.in/iec/foportal/. There are many tax benefits the blogger can avail of. But, one must not use these benefits for one’s personal use. It can result in penalties and fines in doing so. The blog is a business and must be treated like one, and one must follow all the government norms.
To learn about the different tax and tax deductions about blogging, one can refer to a law firm who can guide the other tax processes. One can take help from ‘Vakilsearch,’ an Indian company that helps companies and individuals to solve issues related to law, taxation, and compliance.
Their clients appreciate their services, and they are considered India’s top legal services providing firm. With the help of their highly professional team of lawyers and experts, they solve different cases intellectually and give positive results. One can visit Vakilsearch’s website to know more about its services. One can also contact them and book a call to solve one’s queries.
FAQs
What is the new tax on Bloggers in India?
There is no specific 'new tax' levied solely on bloggers in India. However, bloggers who earn income from their blogs are subject to the same income tax laws as other individuals. Income from blogging is considered business income and taxed accordingly.
Is Adsense income taxable in India?
Yes, Adsense income earned by Indian residents is taxable in India. It's considered business income and is subject to income tax based on your overall income and applicable tax slab.
Is blogging income taxable in India?
Yes, income generated from blogging is taxable in India. It's treated as business income and falls under the income tax purview. The tax liability depends on your total income, including income from other sources.
How do Bloggers file ITR?
Bloggers typically file their income tax returns under the 'Income from Business or Profession' head. You need to maintain detailed records of income and expenses related to your blog. Choose the appropriate ITR form based on your income and deductions.
What is the penalty for Bloggers?
Penalties for bloggers who evade income tax are similar to those for other taxpayers. This includes late filing fees, interest on unpaid taxes, and in severe cases, legal action. Accurate income declaration and timely filing are crucial to avoid penalties.
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