Income-Tax Department Cracks Down on Social Media Influencers for Tax Evasion

The income-tax department has launched a tax-evasion probe against social media influencers and content creators on platforms like YouTube and Instagram.

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The probe was initiated after searching about 10 YouTubers and social media influencers, primarily young artists and actors, in Kerala.

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A "data analytics" investigation by the income-tax department revealed that these influencers and content creators are earning significant income but not accurately reporting it in their income tax returns.

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The department is also examining their deals with social media platforms such as YouTube and Instagram, where they earn based on certain engagement thresholds.

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The income-tax department is taking action against them to ensure proper declaration of income and compliance with tax regulations.

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During the search and evidence-gathering process, the individuals in Kerala were treated respectfully by the tax department. Notices have been issued to these individuals to determine their exact tax liability.

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The income-tax department is extending similar actions to social media influencers and content creators located in other regions of the country. The department is also scrutinizing the social media activities of some celebrities.

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The tax department has collected crucial information about these influencers, including their brand endorsements, promotions, and expenditure using financial instruments like debit and credit cards.

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The introduction of section 194R in the Income Tax Act requires deduction of tax at source at a rate of 10% for any benefit or perquisite exceeding Rs 20,000 provided by a person in a year to a resident arising from their business or profession.

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