How do Bloggers pay Income Tax ?

The number of innovative options for the younger generation to earn their living is growing as technology advances. Even if you own a phone, there are numerous ways to make money and increase your income. Similar to that, there are several online income-generating activities including blogging, vlogging, video creation, and many others that can generate a great life.

And we are aware of the fact that we have income tax on the income earned by us. But unlike traditional businesses, or some having a job profile, professionals often find it difficult to assess their income and tax payable on the income earned during the year.

So, in this article, we will be covering how a blogger would pay Income Tax on the income earned during the Financial Year.

A website is a unique magazine where the blogger posts content related to the platform’s specific topic. The website might be based on a theme linked to food, sports, esports news, kids, or astrology.

A blog is only a platform where a writer may share his ideas, knowledge, and research with readers. These blogs are published on a website, which may be owned by the blogger or by a company that offers blogging services, such as WordPress, Google Blogger, etc.

A blogger’s success and revenue are influenced by a variety of circumstances, including where he resides, where readers are most active, who his target market is, and many more. The entire thing is known as blogging. Thus, the expert is referred to be a blogger.

Sources of Income of a Blogger

A blogger’s revenue can fluctuate significantly, sometimes earning a lot and other times operating at a loss. A blogger therefore cannot rely solely on one source of revenue. He must therefore develop numerous means of income using his expertise in blogging.

Which income stream works for someone will rely on their blogging style, subject matter, and niche. However, there are some types of job that every blogger is competent at. Some of them are listed below.

  • Advertisements: The most common method of income for bloggers is through advertisements. For a website, a blogger creates blogs. A website also constantly remains accessible so that readers can find it. A reader will see various floating windows with advertisements while he accesses the content on a website. These ads are delivered as part of the website ad services. Depending on their browser history, readers who browse the website can see a lot of adverts.

The blogger is paid each time a reader clicks on ad. Similar services are provided by Google AdSense. A website can register with Google AdSense, a service, to generate advertisements for its web pages.

As a result, a blogger monitors the quality and audience retention on its web sites. A blogger can make a lot of money from adverts because spending more time on the website results in returning visitors and higher website traffic. However, the cost of advertisements varies, and as a result, earnings may decline.

  • Affiliate Marketing: This is a common way for bloggers to make money. In affiliate marketing, bloggers advertise various products on their blogs and provide personalized links on their web sites so customers can easily visit the retailer’s website. But what makes the links special?

The link is the website’s most unique feature. The market place customizes the link specifically for each affiliate marketer. The blogger will receive rewards from the online marketplace each time someone purchases a product after clicking on the blogger’s link to the marketplace page.

  • Paid Review: There are numerous product varieties on the market. Additionally, some products require effective promotion in order to attract customers. As a result, companies approach well-known bloggers to write about their products. To produce an effective review of their items, they pay the blogger.
  • Other Methods: As a blogger gains expertise and experience, he or she may be able to diversify their sources of revenue. A blogger can design blogs for other websites if he knows how to design better blog material; if he also knows how to optimize SEO, write blog posts, or has a combination of abilities, he can find employment. In accordance with his skills, he can also work freelance.

Tax Implications

  • Because the individual is self-employed, there is one income category under “Business/Profession” where this employment may match nicely. Nevertheless, which is more appropriate for a blogger: a business or a profession? So, a blogger offers a wide range of services by himself. Hence, identifying a blogger as a professional works out well. As a result, he can pay his taxes on earnings from his profession.

How to file ITR for blogging

  • A blogger can submit his ITR in one of two methods, according the regulations.
    • Regular Tax Scheme
    • Scheme for Presumptive Taxation under Section 44ADA
  • If you decide to use the Normal Tax Scheme as a blogger, you must keep accurate records of all your income and expenses, including all receipts and bills. A blogger may claim a tax deduction for expenses he incurred for blogging purposes when submitting his ITR. The following expenses are ones that a blogger can easily claim a deduction for.
    • Expenses related to Website Maintenance.
    • Depreciation on several equipment used for the purpose of providing Blogging services.
    • Expenses for Hosting the website.
    • Remuneration Expenses.
    • Rent or lease Expenses for the premises.
    • Routine utility expenses like Electricity Bill, etc.
    • Expenses incurred to obtain legal services from the professional
    • Any other expenses incurred for the purpose of providing services of the blogging.
  • In case you do not want to maintain the aforementioned records, then you can choose to pay taxes as per Presumptive Tax Scheme under section 44ADA.
  • If you opt for this method, then you have to declare the Gross Receipts earned from the blogging business.
  • 50% of the Gross Receipts would be treated as your Income from Business and Profession and the taxes is required to be paid after considering the incomes from other heads and Deductions to be claimed.
  • You can contact Finaccle Advisory Pvt. Ltd. to get assistance in filing Income Tax Returns and complying other regulatory requirements.
About Mrudit Thakkar

Mrudit, is a CA Finalist and a Graduate. He is currently associated with Finaccle as an article trainee in its GST and Income Tax Domain.

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