It’s tax season, and for the first time, the Income Tax Department has a dedicated category for social media influencers! If you’re a content creator, blogger, online coach, or any digital gig worker, here’s what you need to know about filing your Income Tax Return (ITR) this year.
Thank you for reading this post, don't forget to subscribe!New Profession Code: 16021
Good news – there’s a specific profession code just for you: 16021. This code is now live in the ITR utilities for the Financial Year 2024–25 (Assessment Year 2025–26). When you’re filing under ITR-3 or ITR-4 (Sugam), make sure to use this code.
Which ITR Form Should You Use?
You have two main paths: declaring your actual income and expenses, or opting for presumptive taxation.
ITR-3: For Actual Income and Expenses
Choose ITR-3 if you plan to declare your exact income and expenses. This means you’ll need to maintain detailed financial records. This form is ideal if you have complex income streams (like brand deals, affiliate marketing, or even other sources like salary or rental income) or if your turnover exceeds the limits for presumptive taxation.
ITR-4 (Sugam): For Presumptive Taxation
If you prefer a simpler approach, ITR-4 (Sugam) is for you. With presumptive taxation, you don’t need to keep extensive books of accounts. Instead, you declare a fixed percentage of your gross receipts as taxable income:
- As a business (Section 44AD):
- 8% of gross receipts (for cash transactions)
- 6% of gross receipts (for digital payments)
- This applies if your turnover is within the limits set by the Income Tax Act (generally up to ₹2 crore, or ₹3 crore if 95% of receipts are digital).
- As a profession (Section 44ADA):
- 50% of gross receipts
- This applies if your gross professional receipts don’t exceed ₹50 lakh (or ₹75 lakh if 95% of receipts are digital).
A word of caution: Tax experts point out that content creation isn’t officially listed as a “notified profession” under Rule 6F of the Income Tax Act. This can create some ambiguity about audit limits and which sections apply. If in doubt, it’s always smart to get advice from a tax professional!
How to File Your ITR
Ready to file? Here are the steps:
- Calculate Your Income: Figure out your total earnings for the financial year.
- Work Out Expenses/Deductions: If you’re not going with presumptive taxation, calculate all your eligible business expenses and deductions.
- Log In: Head to the Income Tax e-filing portal.
- Select Your Form: Choose either ITR-3 (for actual income/expenses) or ITR-4 (for presumptive taxation).
- Enter the Code: Don’t forget to put in the new profession code 16021.
- Fill and Submit: Complete all the necessary details and submit your return.
This new code is a big step in bringing the influencer economy into India’s tax system. How it fully unfolds will depend on future clarifications, but for now, you know what to do!
Do you have any questions about specific deductions or how to classify your content creation income?
