I-T Dept Launches Tax-evasion Probe Against Social Media Influencers

On Thursday, official sources said that the Income Tax Department has launched an investigation against some social media influencers and content creators on platforms such as YouTube and Instagram for allegedly not showing their income and profits commensurate with their earnings.

The department started the action last week after it searched for 10 YouTubers and other social media influencers – mostly young artists and actors – in Kerala.

Sources said the department’s “data analytics” investigation found that these social media influencers and online content creators make “significant” profits but either don’t display or file it in income tax (ITR) returns or filings, largely due to ignorance of the laws. taxes.

Social media influencers and online content creators are those who have the ability to transact online and influence their audiences’ purchase decisions or opinions about a product, service, brand, or experience due to their power, knowledge, location, or relationship with their audience.

The sources said that the individuals who were searched in Kerala were treated “extremely kindly” by the tax department during the process of collecting evidence and even while recording their statements.

They added that these individuals were also issued notices as part of the investigation moving forward so that their “exact tax liability” could be determined.

The sources said that some social media influencers who are in other parts of the country have been subjected to similar procedures, and the ministry is examining such activities on social media of some celebrities as well.

According to the sources, the IRS has collected “vital information” about these online influencers and content creators, such as brand endorsements they have made, paid and unpaid promotions made, expenses incurred using multiple financial instruments such as debit and credit cards, and their deals with platforms. Social media, such as YouTube and Instagram, where they earn money based on certain criteria such as collecting social media shares beyond a certain limit.

The sources said the database of withholding taxes at the source was also exploited by the department before inspecting these individuals and issuing notices to others.

The Central Board of Direct Taxes (CBDT), which is the managing authority for the IT department, introduced new provisions for taxes payable last year in relation to benefits received in a business or profession, and said such benefits could be cash, in kind, or partly in both. Forms.

Budget 2022-23 brought a new section – 194R – in the Information Technology Act, which requires deduction of tax at source at the rate of 10 per cent by any person, providing for any benefit or condition exceeding Rs 20,000 per annum to a resident, arising out of such resident’s business or profession .

(This story was not edited by the News18 staff and was published from a syndicated news agency feed – PTI)