Daijiworld Media Network - New Delhi
New Delhi, Jul 26: In a move aimed at simplifying tax compliance for India’s booming creator economy, the Income Tax Department has introduced a dedicated category for social media influencers and digital content creators in the Income Tax Return (ITR) forms for FY 2024-25 (Assessment Year 2025–26).
A new profession code, ‘16021’, has been added under ITR utilities, specifically recognizing income from product endorsements, brand promotions, online coaching, blogging, and other digital content-related work. This code can be used while filing ITR-3 or ITR-4 (Sugam), depending on the taxpayer's income level, business model, and choice of taxation scheme.
Influencers, bloggers, and online coaches must now file returns either under ITR-3, which applies to individuals and Hindu Undivided Families (HUFs) earning business or professional income, or under ITR-4, which is used by individuals, HUFs, and resident partnership firms opting for presumptive taxation under Sections 44AD, 44ADA, or 44AE.
According to tax experts, those choosing presumptive taxation under Section 44ADA — generally applicable to professionals — should file ITR-4. This is allowed for professionals with gross receipts up to Rs 50 lakh, or Rs 75 lakh if cash receipts make up less than 5% of the total. For business income, Section 44AD allows a presumptive income declaration at 8% for cash receipts or 6% for digital receipts, applicable up to Rs 2 crore or Rs 3 crore, depending on the cash component.
The ITR-3 form is suited to those who need to report income from multiple sources such as salary, residential property, capital gains, and other business or professional income. However, it is only applicable to individuals and HUFs with business or professional earnings. Taxpayers eligible for ITR-1, ITR-2, or ITR-4 are not permitted to use ITR-3.
The ITR-4 (Sugam) form is designed for those using the presumptive taxation scheme. It allows individuals, HUFs, and resident partnership firms to simplify compliance without maintaining detailed books, provided they meet the specified income thresholds.
By introducing the new profession code, the government has officially recognized the content creation and influencer industry as a distinct professional category. It also aims to improve reporting accuracy and ensure that income from paid promotions, monetized content, and brand partnerships is properly taxed.
Tax professionals are advising creators to maintain basic documentation of their earnings, platform payouts, and promotional engagements. While the move makes filing easier, accurate disclosures remain critical to avoid compliance issues.