Income Tax

How do you file income tax returns if you are Bloggers & Freelancers?

Running a blog is a major source of revenue for large number of entrepreneurs and free lancers who earn income from advertisements placed on their blogs and from product referrals. In fact in what is known as the gig economy, the number of freelancers has increased consistently over the years and their proportion is only expected to rise.

In this article we examine the tax treatment of income earned by bloggers and freelancers and the key procedural aspects relating to determination of taxable income and procedure of filing of returns.

Major source of income for Bloggers& Freelancers

  • Advertisement
  • Blog Consultancy
  • Freelance Income
  • Providing services through Freelance websites

Filing of Income-Tax of Bloggers& Freelancers

Bloggers are freelancers. Income earned by blogging in India is chargeable to income-tax. Since blogging is a business/profession, the income from blogging will be computed in the same manner like the income from business/profession is computed and taxed under the head “Profits and Gains of Business & Profession”.

All the expenses allowed as deduction have to be deducted from the gross receipts from blogging. Depreciation is allowed on the assets purchased for the purpose of earning revenue at the rates prescribed by the Income-tax Act, 1961. For example, depreciation can be claimed on computers purchased and used for the purposes of blogging.

The incomes earned which are not related to the profession for example interest income on funds earned through blogging are not to be taxed under the head “Profits and Gains of Business & Profession” but are to be taxed under the head “Income from Other Sources”.

Expenses allowed as deduction for bloggers

  • Domain hosting expenses, Domain purchase expenses
  • Rent
  • Electricity
  • Telephone/Internet
  • Salary to the employees
  • Fuel expenses
  • Any other expenses related to the business
  • Depreciation on the fixed assets acquired for the business

Division of expenditure

As blogging is not often a full time activity, the assets such as computers as well as expenditure such as electricity may be used for both business and personal purposes. The question arises as to how such expenses would be eligible for claim from the revenue earned from blogging and freelancing.

Where common assets and expenses are used or incurred, the taxpayer should make a fair allocation of the expenditure and assets between those used for personal purposes and for business purposes. The allocation should have a sound basis which can be proved before the Income Tax department as there is a risk that the Department may challenge some claims of expenditure and seek to increase the reported income by the tax payer. In case of unsupported claims, tax assessing officers can levy penalty on the tax payer.

Income Tax Return to be used

Individuals earning income from business and profession are required to file ITR 3.

Bloggers would not qualify for filing returns under Sec. 44ADA using presumptive basis of taxation unlike other professionals.  

Due dates for payment of Advance Tax

It is important for those earning income from business to know the rules relating to payment of advance tax. Businesses are required to estimate the total taxable income for the upcoming financial year, for example for financial year 2019-20 in each of the quarters as follows and make payment of advance tax to the Government.

In case advance tax is not paid, the individual would be liable to pay interest on such delayed payments when filing income tax returns at the end of the year.

Due Date
Advance tax payable
15th June
15% of total tax liability
15th September
45% of total tax liability
15th December
75% of total tax liability
15th March
100% of total tax liability

Note: Payment of advance tax (100%) is required only by 15 March if tax payer opts for presumptive taxation under section 44ADA.

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