Making Money from Reels? Your Income Isn’t Tax-Free - Here’s How Influencers Should File ITR

Influencers are no longer just creators; they are entrepreneurs, brand ambassadors and serious professionals who earn money. Currently, India has nearly 2.5 million influencers with over 1,000 followers. However, only 10% are actively monetising their content. The monthly income for influencers can range from ₹20,000 to ₹200,000 per month.

Reports stated that the creators industry is anticipated to expand further at a compound annual growth rate of 25% until 2026. As the income grows, so does the scrutiny. Like all other earning individuals, influencers are also liable to pay their taxes. So it’s important for them to understand the tax implications before the deadline, September 15.

Before moving ahead with the ITR (income tax return) filing for the financial year 2024-2025, an influencer should understand the tax rules for them.

Tax Rules for Influencers

Income earned by influencers during a financial year is taxable. Even in some cases, it may also trigger a mandatory audit. Since creators earn from multiple sources like brand collaborations, ad revenue, or social media platforms, this income is treated as “business or professional income” under the Income Tax Act.

Hence, the total income is taxed as per the applicable income tax slabs. Influencers can choose between the “old and new tax regime” depending on their deductions and exemptions.

In addition to income tax, influencers are also liable to pay Goods and Services Tax (GST) if their annual revenue exceeds ₹20 lakh (₹10 lakh in northeastern states). Since content creation involves offering services like sponsored posts or shoutouts, GST at 18% must be charged and reflected through proper invoices.

It's important to note that GST is separate from income tax and must be accounted for independently. Moreover, if influencers receive non-cash payments (like gadgets, luxury items, or trips) valued above ₹20,000 in a year, a 10% TDS applies.

These taxes differ from other categories such as capital gains, which apply to investments and are taxed separately based on holding periods. Additional liabilities may also arise from foreign income, state-specific levies, or platform-specific payouts.

Given the complexity, it’s strongly recommended that influencers consult a tax professional to ensure full compliance and avoid penalties.

ITR Forms for Influencers

Influencers are required to file the return via either ITR-3 or ITR-4 form. ITR-3 is for people who earns from business or profession, while ITR-4 is meant for influencers who opt for presumptive taxation unser Section 44 DA.

Influencers earning up to ₹2 crore annually from business activities or up to ₹50 lakh from professional services are eligible to opt for the presumptive taxation scheme.

Steps to File ITR for Influencers

Step1: Verify AIS and Form 26AS. Once you gather all your documents, you need to tally them with AIS and Form 26AS.

Step 2: Choose the correct ITR form, either ITR-3 or ITR-4.

Step 3: Declare all incomes.

Step 4: Claim the deductions you are eligible for.

Step 5: Verify your returns within 30 days.

Tax Audit for Influencers

Influencers whose total business income does not exceed ₹2 crore—or ₹50 lakh in the case of professional services, can choose to file taxes under the presumptive taxation scheme for simplified compliance.