As a blogger, it is difficult to understand how you should pay taxes. Here is a small guide how one can pay blogging income tax
Overview:
As technology is developing, the new ways to earn a livelihood for the young generation are also increasing. Even if you have a phone, you have many methods to earn some money and get some income. And similar to that, there are many earning methods online, such as blogging, vlogging, video creation, and many other ways, which can give an excellent income.
And we know you have to pay taxes for your income. That is what we call Income tax. But in a not-so-traditional job or work profile, professionals are confused about how they can pay their Income tax.
And in this article, we will see how to pay your blogging income tax. Or how you can pay taxes, save on them, and what you should deduct from your income as liabilities before paying income tax. Let us know about blogging and bloggers first.
What Is Blogging?
As you have seen and read newspapers in the old times. Do you remember which kind of articles a newspaper contains? Yes, you are right.
Similarly, a website is a specified magazine where the blogger provides you with articles related to the website’s theme. The website could be based on a cooking-related theme, sports theme, esports news theme, kids theme, or astrology theme. There could be many more options, and we even do not know.
Empower your business with expert precision – our top-tier bookkeeping service for a seamless financial journey!
Simply a blog is a place where a writer can express his thoughts, research, and knowledge to the readers. These blogs are uploaded on a website, which can be owned by the blogger itself or may belong to a blogging service provider, such as google’s blogger, wordpress, etc.
The growth and income of a blogger depend upon different factors like which country he lives, where people read his articles more, what are his target audience and a lot more. The whole job is called blogging. So the professional is called a blogger.
Sources of Earning for a Blogger
As a fluctuating income source, sometimes a blogger makes a lot of income, and sometimes the income also goes down. Therefore a blogger can not rely entirely on one source of income. Therefore he has to make multiple ways to earn with the help of his blogging skills.
It depends on someone’s blogging style and theme and which income stream go for them. But there are some standard fields of work that every blogger can do well. Some of them are mentioned below.
- Advertisements: This is a blogger’s most popular earning way. A blogger writes blogs for a website. And a website always remains online so that readers can find them easily. As a reader opens a website’s articles, he will see some floating windows with ads. These ads are provided ad services for the websites. Readers who go through the website might see many ads per their web history.
As any reader clicks on any ad, the blogger earns from that. Google AdSense provides similar services. Google Adsense is a service by google where a website can be registered to get ads for its web pages.
And for this reason, a blogger keeps checking on the quality and audience retention on its web pages. Because more time on the webpage leads to returning readers and increased website traffic, a blogger can earn a lot with advertisements. But advertisements have varying rates; therefore, earnings can sometimes go down.
Stay ahead of the tax game – use Tax Calculator India for insightful projections.
- Affiliate Marketing: This is also a popular method of earning for bloggers. In affiliate marketing, the bloggers promote some of the products in their blogs and give a customized links on their web pages so they can quickly go to the marketplace. But what is unique with the links?
The link is the most special thing on the webpage. The link is specially modified for every affiliate marketer by the marketplace. So that whenever someone buys a product while visiting the marketplace page by the blogger’s link, the blogger gets some incentives in exchange from the online marketplace.
- Paid Review: There are many kinds of products available in the market. And some products to get people’s attention need to be promoted well. Therefore the brands approach famous bloggers who write articles related to their products. They pay the blogger to write a good review of their products.
If someone has a cooking blog, then a utensil brand can approach them so that the blogger can mention a review of their utensils on his website.
- Other Methods: A blogger can also have more income streams as he gets some experience and skills in his work. If a blogger knows about better designing content on blogs, he can do blog designing for other websites; if he knows how to optimize SEO, create content for blogs or have a group of skills together, he can get work. He can also do freelance jobs as per his skills.
Learn more about Types of Income Tax Notices
Tax Implications
Now, after knowing all this about blogging, one would have wanted to know which kind of income tax form he should fill in his details.
So, there is one income field under Business/Profession in which this work can fit well because a person is self-employed. But what is best suited for a blogger, a Business, or a Profession? So, a blogger provides a lot of services by himself. Therefore, declaring a blogger as a professional goes well. So he can pay his taxes for income under his profession.
How to File ITR for Blogging?
According to the rules, there are two ways a blogger can file his ITR.
- Normal Tax Scheme
- Presumptive Tax Scheme under section 44ADA
If you choose the Normal Tax Scheme as a blogger, you must keep a proper record of all the expenses and income; all the receipts and bills must be kept well recorded. While filing the ITR, a blogger can claim for deduction in tax for the expenses he had made for the blogging purpose. Following are the expenses for which a blogger can easily ask for a deduction.
- Expenses for maintenance of the website
- Expenses for Hosting a website
- Expenses as the rent of office premises
- Salary for the hired staff for blogging-related purposes
- Daily utility bills like electricity bills
- Depreciation of equipment and tools for official purposes
Importance of Filing Income Tax Returns
Filing tax returns is a legal requirement for all Indian citizens whose income exceeds the specified threshold. Whether filed manually or electronically, it is mandatory for individuals with taxable income. The deadline for filing income tax returns is typically July 31 each year, and penalties apply for late submission. Timely submission is crucial as delayed filings can impact eligibility for visas or loans. Failure to comply may also lead to legal consequences, including potential lawsuits and penalties for tax evasion, which can result in imprisonment ranging from three to seven years in India. To avoid these issues, ensure timely tax payments. E-filing tax returns and making online TDS payments are now convenient and accessible options.
Conclusion
Suppose you do not want to keep the burden on your head. If you can’t keep the proper record of your expenses, then you should choose the Presumptive Tax Scheme under section 44ADA. If you choose this method, you must declare your gross receipts from your blogging activities and only 50% of gross receipts as your income under the tax. And you also do not have to get your account audited. You can also get in touch with Vakilsearch to get help in this matter.
Frequently Asked Questions:
Do bloggers need to pay income tax on their blogging earnings?
Yes, bloggers in India need to pay income tax on their blogging earnings, regardless of the amount they earn. Blogging income is considered to be business income under the Income Tax Act, 1961.
How can bloggers ensure that their blog income is tax-compliant?
To maintain tax compliance for their blog income, bloggers should maintain precise financial records of both earnings and expenses, meet their income tax return deadlines, and fulfill tax obligations. Additionally, they should explore available deductions and exemptions to optimise their tax liability.
What are the tax implications of earning through blogging in India?
In India, the tax considerations for blogging income revolve around several key elements, including the total income derived from blogging, the specific categories of income (e.g., advertising revenue, affiliate earnings, sponsored posts), and the blogger's other sources of income. Bloggers have the option to adhere to standard tax regulations outlined in the Income Tax Act or choose presumptive taxation under Section 44AD. The latter approach involves taxation based on a fixed percentage of their gross turnover, relieving bloggers from the necessity of meticulously tracking their expenses.
Do Youtubers and bloggers have similar income tax obligations?
Yes, Youtubers and bloggers have similar income tax obligations. Both are considered to be business income under the Income Tax Act, 1961.
Can you explain the process of paying income tax for Indian bloggers and Youtubers?
For Indian bloggers and YouTubers, the income tax procedure can be summarised as follows: Calculate your anticipated annual tax liability using an online income tax calculator Make advance tax payments in instalments if your estimated tax liability surpasses a specific threshold Submit your income tax return by the tax return deadline, typically 31 July for each financial year Settle any outstanding tax payments or claim refunds as necessary.
Should bloggers register their blogs as businesses in India for tax purposes?
While it is not obligatory for bloggers in India to officially register their blogs as businesses for tax purposes, there are notable advantages to consider. This includes the ability to choose presumptive taxation under Section 44AD, access specific tax deductions and exemptions applicable to businesses, and potentially secure a business loan when required.
Are there income thresholds for bloggers below which they may not need to pay taxes?
Yes, there are income thresholds for bloggers below which they may not need to pay taxes. The basic exemption limit for individuals in India for the financial year 2023-24 is ₹2.5 lakhs. This means that if a blogger's total income for the year is below ₹2.5 lakhs, they do not need to pay any income tax.
How soon after starting a blog can bloggers expect to start paying income tax?
Bloggers are liable to pay income tax on their blogging earnings from the very first year they start earning income. However, they may not need to pay any taxes if their total income for the year is below the basic exemption limit.
Can bloggers offset their blogging expenses against their income for tax purposes?
Yes, Bloggers have the opportunity to offset their blogging expenses against their income for tax purposes, allowing them to lower their taxable income by deducting these expenses. This includes various common blogging expenditures, such as domain hosting and web development expenses, costs related to themes and plugins, content marketing expenditures, social media advertising costs, and travel expenses associated with their blogging activities.
What are some common deductions and exemptions available to bloggers to lower their tax liability?
Bloggers can leverage various common deductions and exemptions to reduce their tax liability, which encompass deductions for business expenses, investments in research and development, investments in new plant and machinery, deductions for business losses, and exemptions for income generated from exports.
Read More,
