Taxes Influencers Need To Pay As Per Budget ’22-23
What are The Taxes Influencers Need To Pay?
As part of Budget 2022–23, Section 194R of the Income Tax Act was updated to include a new clause that is applicable to social media influencers. This new clause dictates that tax be withheld at the source (TDS) on freebies that influencers get from businesses for the purpose of sales promotion.
The new clause included the requirement that a person must deduct 10 percent of any benefit or perquisite worth more than Rs 20,000 that is given to a resident as a result of the resident’s business or profession. This provision was brought in as part of the new clause.
This indicates that influencers have revealed all of the freebies that they received from the businesses, and tax withholding is applied to it only if it is maintained by them because things of this nature will be termed a perquisite.
Because micro-nano influencers primarily engage in barter associations, this is most likely to have an effect on them. While they are still establishing a foothold in the industry, this gives them the opportunity to begin cultivating partnerships with various businesses.
However, the provision in the budget also makes room for acknowledgement at the government level of the fact that a new breed of professionals is being formed. An official government recognition is something that is great for ushering in a new breed of professionals. This is something that is a massive validation for influencers and content creators.
The Future of The Creator Economy
Experts see an exponential rise of the creator economy in India just in 2022. The creator economy rose from $1.7 billion in 2016 to $6.5 billion in 2019 and $9.7 billion in 2020. As the creator economy grows year after year, these creators will need to find sustainable ways to earn income.
The fears of an inconsistent income flow and a possible lapse in popularity and influence is still an issue these creators deal with, especially those who have turned to content creation as their main source of income.
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The Creator Economy – Definition, Examples
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