Are X (Twitter) content creators prepared for this tax shock?

Learn about taxation rules for Twitter (now X) content creators. Factors affecting tax treatment, income sources, and GST implications on social media earnings are highlighted.

Twitter is now X, but there’s a lot more that’s happening on the social media site. The monetisation of content is one example. But this also means that there are viable taxation rules that are applied to the fees. In this article, we will focus on Twitter's taxation rules that social media creators must know.

Highlights:

• Tax rules impact content creators on X platform.

• Engagement influences tax treatment, like 'Profit and Gains' category.

• Verified users with 15M impressions get payouts from X.

• Income sources: promos, subscriptions, workshops, commissions.

• 10% TDS on gifts above Rs. 20,000; 18% GST on Rs. 20 lakhs + earnings.

Factors affecting Twitter tax rules

Taxation rules on earnings from Twitter can vary among users based on their engagement and activities on the platform. Tax experts suggest that how you participate on Twitter will dictate the tax treatment of your income.

For instance, if your primary earnings come from creating content on Twitter, your income may be subject to taxation under the category of 'Profit and Gains from Business and Profession.'

How will income from Twitter be taxed?

Verified users and organisations that have had over 15 million post impressions in the last three months are now receiving notifications from Twitter, or X, regarding payouts under its new revenue-sharing scheme.

This aligns with the revenue-sharing models employed by other social media platforms, where content creators, also known as influencers, earn income through brand promotions and other activities.

Also Read: Here's how you can appoint a nominee for digital assets under your name

Calculation of tax on income from Twitter

Social media content creators can receive various forms of income in their bank or remittance accounts. This includes earnings from promotional activities, subscription fees, revenue from workshops, and commissions from merchandise sales. Additionally, some forms of income may be received in kind, such as gifts and products for review.

Starting July 2022, the Income Tax department implemented a Tax Deduction at Source (TDS) of 10% on gifts valued at Rs. 20,000 or more in a year.

According to X's income tax rules, the income earned is considered within the scope of GST (Goods and Services Tax) regulations. As a result, a tax rate of 18% will apply to the social media earnings. However, this tax will only be imposed when the cumulative income from various services, like the interest earned on Fixed Deposits (FDs), surpasses an annual threshold of Rs. 20 lakhs.

Also Read: Check details of your unclaimed bank deposits with RBI's new UDGAM portal

Conclusion

Navigating the tax landscape of X, formerly Twitter, is essential for content creators. Gaining insights into diverse tax effects and revenue origins guarantees well-informed financial control within the realm of social media income.

Click here for the latest articles on tax planning.

Disclaimer: This article is intended for general information purposes only and should not be construed as investment or legal advice. You should separately obtain independent advice when making decisions in these areas.