New Delhi (Agency): The income-tax department has initiated a probe against social media influencers and content creators on platforms like YouTube and Instagram for alleged tax evasion, according to official sources. The action was taken after the department conducted searches on around 10 YouTubers and other influencers, mostly young artists and actors, in Kerala.
The investigation, driven by data analytics, revealed that these social media influencers and content creators are earning substantial incomes but are either not disclosing or under-reporting their earnings in their income tax returns. The sources suggest that this is largely due to their lack of awareness about tax laws.
Social media influencers and content creators possess the ability to influence and shape the purchasing decisions and opinions of their online audience. Their authority, knowledge, position, or relationship with their audience empowers them to endorse products, services, brands, or experiences.
During the search operations in Kerala, the tax department treated the individuals with care, ensuring a smooth evidence-gathering process and recording of their statements. Notices have also been issued to these individuals as part of the ongoing probe to ascertain their exact tax liabilities.
The department has expanded its investigation to include other social media influencers across the country, as well as scrutinizing the social media activities of certain celebrities. In gathering vital information, the tax department has focused on brand endorsements, both paid and unpaid promotions, financial transactions made using debit and credit cards, and the individuals’ dealings with social media platforms like YouTube and Instagram.
The tax department has also utilized the tax deducted at source (TDS) database to identify potential discrepancies and issue notices. In line with the Central Board of Direct Taxes’ provisions, any benefit or perquisite received by a resident exceeding Rs 20,000 in a year must be subject to a 10% tax deduction at source.
The investigation serves as a reminder to social media influencers and content creators to ensure compliance with tax laws and accurately report their earnings. As digital platforms continue to grow in popularity, it becomes imperative for individuals to fulfill their tax obligations and contribute to the nation’s revenue. The income-tax department’s scrutiny will help maintain transparency and fairness in the taxation system.
