Thinking or just started a YouTube channel? Here’s how to file your ITR this tax season

How is income from YouTube taxed

The creator economy in India is booming, with thousands of young professionals turning to YouTube and social media platforms to build careers. But with income comes the responsibility of paying taxes and many new creators are often unsure about how to file their Income Tax Returns (ITR).

Unlike salaried employees, where the employer deducts tax at source and provides a Form 16, YouTubers and influencers must report income as earnings from business or profession. This means they need to keep records of the money received from platforms such as YouTube, Instagram, or brand collaborations, as well as expenses related to content creation.

“YouTubers and influencers can file their ITR by showing income earned from business and profession. The income which is earned from YouTube or similar platforms can be professional income. If one is earning income by way of selling merchandise etc , then its income from business,” says Sujit Bangar, Founder Taxbuddy.com.

Those individuals who have business income can use either ITR 3. ITR 4 can be used only if you are eligible to opt for presumptive scheme of taxation and your taxable income does not exceed Rs 50 lakh in a year. Only certain persons carrying specified profession are eligible to opt for presumptive scheme of taxation under Section 44ADA which includes professionals like doctors, lawyers, chartered accountants, company secretaries, cost and management accountants, engineers, architects and certain people engaged in film line etc. "If a youtuber is also a professional like a lawyer and a chartered account, then they can also file income tax as a professional," says Balwant Jain, a Mumbai-based tax consultant.

One important thing is that as income of YouTubers and influencers is from business and profession, they can’t change tax regime every year. They have to be very cautious while choosing tax regime, explains Bangar

This distinction is crucial. For creators, the choice between the old and new tax regime is not as flexible as it is for salaried individuals. While salaried taxpayers can switch regimes every financial year, professionals and businesses are bound by their initial choice. If a YouTuber opts for the new tax regime, with lower slab rates but without major deductions, they cannot freely switch back to the old regime in subsequent years.

Another important point is expenses which can be claimed as deductions. YouTubers can claim deductions for expenses incurred in producing content such as camera equipment, editing software, internet bills, or even rent for a studio. These deductions can significantly reduce taxable income.  The bottom line is filing taxes as a content creator isn’t just about compliance, it’s about smart planning. The right tax regime, accurate expense tracking, and timely filing can make a big difference to how much money stays in your pocket.

So compute your tax liability under both new and old tax regimes, taking into account deductions of 80C, 80D, home loan, among others, and invest.