Income Tax on Income from Blogging

Introduction:

Thanks to the IT revolution which has opened many new avenues for the young generation. One such avenue is blogging which is used as an earning medium by a large number of people. A blog is nothing but an article written by a person expressing his knowledge, experience, or thoughts in relation to any particular topic. The blogs are placed by the author on his own website or any other blogging platform. The author of the blog can earn advertisement income from Google ad sense or by affiliate marketing of the products on his blogging sites/ blogs.

A new version of blogs has also come into a trend which is known as ‘Vlogs’ which is nothing but visual content placed on platforms like YouTube. If you are a blogger/ vlogger, you might be interested in knowing whether your income from blogging/vlogging is taxable or not. Let’s discuss…

Income tax on blogging income under Income Tax Act

The first thing you should make clear is that the blogging income is taxable under the Income Tax Act. Income from blogging/vlogging is taxable under the head “Profit and Gains from Business or Profession”.

The question comes to our mind

Whether blogging income is business income or professional income?

Writing a blog generally needs some knowledge or expertise. Like a doctor can write quality stuff about some health issues or medicines. A Chartered Accountant can write articles on taxation or accounting issues. A sportsman can express meticulously about sports events etc. Therefore, the element of professional skills and experience is somewhat necessary for delivering a good blog. So, in our opinion, income from blogging should be considered a professional income when filing income tax return.

How to file ITR for blogging?

There are two options for filing ITR online for a blogger/ vlogger:

• Normal Tax Scheme
• Presumptive Tax Scheme under section 44ADA

Under the Normal Tax Scheme, a blogger needs to keep proper records of his income and expenses. While filing ITR, the blogger can claim a deduction for all expenses incurred by him towards his blogging activities. Generally, following expenses are deductible from blogging income as below:

• Website Maintenance Expenses
• Domain Hosting Charges
• Rent for office premises
• Salary of staff hired for the blogging activities
• Electricity/ Water/ Mobile Bill
• Depreciation of equipment used for blogging activities.

The details of all incomes & expenditures of the blogging activities are to be declared while doing ITR filing. In addition, all assets and liabilities related to blogging are also to be disclosed in the ITR form.

If you don’t want to have the burden of keeping records and declaring each and every transaction, there is yet another option for you as a blogger i.e. ‘Presumptive Taxation Scheme under section 44ADA’. If you are declaring income u/s 44ADA, you are just required to declare your gross receipts from blogging activities and declare a minimum of 50% of gross receipts as your taxable income. The main advantage of the presumptive tax scheme is that you need not maintain books of accounts. Further, you are not required to get your accounts audited.

For example: Suppose your gross receipts for F.Y. 2021-22 from blogging are Rs. 18 Lakhs. In this case, you have to declare a minimum of Rs. 9 lakhs as your taxable income on a presumptive basis. However, you can declare a higher income if actual profits are more than Rs. 9 Lakhs.

It is your choice whether you want to declare blogging income under ‘Normal Taxation Scheme’ or under ‘Presumptive Taxation Scheme’.

For ITR online Filing Services connect at 9660930417

Is Section 44ADA applicable to blogging?

The benefit of section 44ADA can be taken only by those bloggers who are either specified professionals or notified professionals for the purpose of section 44ADA. Following are the specified/ notified professions under section 44ADA:

• Engineering
• Legal
• Architectural profession
• Accountant
• Medical
• Technical Consultant
• Interior Decoration
• Other notified professionals such as company secretary, cost accountant, authorized representatives, film artists, sport-related persons such as sportsmen, referees, umpires, sports columnists, and IT professionals.

Is there a turnover threshold for section 44ADA for bloggers?

Yes, the option under section 44ADA can be availed by only those professionals who are having a turnover or gross receipts not more than Rs. 50 Lakhs during the Financial Year. In case your blogging receipts are more than Rs. 50 Lakhs, you have to efile ITR under normal tax scheme.

Which ITR form is applicable for blogging income?

• If you opt to file your ITR under ‘Normal tax Scheme’, ITR-3 applies in your case. In ITR-3, you are required to fill in details of the Balance Sheet i.e. assets & liabilities & Profit & Loss Account i.e. incomes & expenses.

• If you opt to file your ITR under ‘Presumptive Tax Scheme’, ITR-4 (Sugam) applies which is a simple ITR form where you need to show only the gross receipts, net profit, and figures relating to cash balances, sundry debtors, sundry creditors, etc.

Other points to remember:

• Income Tax Return for blogging income is to be filed on or before 31^st July after the end of the financial year.
• All taxpayers are also required to comply with advance tax rules if their estimated tax liability is Rs. 10,000 or more in a financial year. Advance tax is paid in quarterly installments. However, if you are opting for presumptive tax scheme u/s 44ADA, you need to pay advance tax only in one installment i.e. on or before 15^th March of the financial year.
• You can claim deductions under section 80C-80U from your Gross Taxable Income in respect of various investments and expenditures like LIC, PPF, NPS, Health Insurance, etc.

For ITR online Filing Services connect at 9660930417