Social media influencer taxation: How are minor Instagram, YouTube influencers taxed? Check income tax calculation and GST rules

Child influencer tax: Social Media platforms like Instagram, YouTube are not just a source of entertainment, but also a source of income for many. Influencers of all age, even children below the age of 18 (minors), earn handsomely from Instagram, YouTube, and other social media platforms.  

Earning from social media solely depends on the views, number of followers, number of subscribers, engagement of the video, niche of the channel, and traffic source, etc, and income earned from any of the above means is taxable.

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Having said that, the question that comes to mind is — do child influencers on Instagram and YouTube have to pay taxes? And if yes, how? 

The answer to the question is yes. Minors who earn above Rs 2,50,000 have to pay tax, but there are two different rules which appy to minors: 

1.Unearned Income 

If the income is unearned by the child, that is - the income from funds as gifts from family members, relatives or friends, etc; also interest earned through savings bank accounts, fixed deposits or other investments that have been made in child’s name by parents. This type of income is clubbed with parent’s income and taxed. 

If both the parents are working professionals, then the minor’s income is clubbed with that of the parent whose income is higher. However, tax exemption of Rs. 1,500 per child per year for a maximum of two children is available to parents on minors’ income. The parents will pay tax for the minor’s income along with their own taxes.

2. Earned Income 

Income from skill, talent and personal work is considered earned income. Earnings of Instagram and YouTube influencers come under this umbrella and are taxed accordingly.  

According to Tax Expert Gauri Chadha, “Any income generated out of skill, talent and personal work going to minors is taxed after all the deductions. The tax is applied on the balance earning.” 

3. Profit or Gains from Business Profession

In case of Instagram and YouTube child influencers, the income earned from such social media avenues is also taxable under the head - Profits or Gains from Business or Profession (PGBP), which states that "value of any benefit or perquisite, whether convertible into money or not, arising during the course of the carrying on of any business or profession".

“The income of influencers in general are treated as business income and taxed as such. The receipts of them are taxed after deducting the expenses for running the business, as per the slab applicable on them. The same is applicable for the child influencer as well. This is treated as business income as the influencer exercises their skill and talent to earn revenue,” says Archit Gupta, Founder and CEO of Clear Tax. 

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Is Goods and Service Tax (GST) applied to Instagram and YouTube child influencers? 

According to Archit Gupta, GST is applied to influencers for the online service they provide. In case the receipt crosses Rs 20 lakhs a year, then the influencers are required to get GST registration and required to comply with GST rules as well.

Can an Instagram and YouTube child influencer apply for a PAN card? 

PAN card is mandatory for filing ITR and according to Tax Expert Gauri Chadha, even a minor can apply for a PAN card.

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How do child Instagram and YouTube influencers file ITR?

According to Archit Gupta, child Influencers can file the ITR by themself. “They can file the ITR for their own earnings from influencing activity. However, they need to appoint one of their parents as a legal guardian on the IT Portal and the guardian can file on behalf of the child,” he sums up. 

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