Tax Impacts on Income from Blogging

Blogs are the informal articles written for the purpose of showing thought process and expertise of topic. A blog is digital portal where you can share thoughts, ideas that you have learned during your career and life journey.

The first blog that was written is Links.net, created by Justin Hall in the year 1994 as place to publish his writing. The site consisted entirely of brief posts, each one sharing a link and some of his thoughts on the content within.

Sources of Income for Blogger:

• Advertisement: One of the oldest source of income for blogger is to advertise their blog on Famous website.
• Sponsored Post / Paid Review: Most of the blogger post their link at various website, if reader clicks on the links and purchase of product or services, the blogger will earn money. Blogger can also request popular blogger for paid review.

Tax on Blogging Income Under the Income Tax Act:

The income earned by blogger is subject to tax provision under Income Tax Act, 1961. Tax calculation provision for blogging Income will be covered under section 28 of Income Tax Act, 1961 as Income from Business or profession. Some of the expenses incurred by Bloggers are allowed against income as under:

• Expense in relation to Domain hosting and Website development or any other software development expenses.
• Rent expense for official use of Premises.
• Depreciation on assets purchase such as Laptop, office equipment, Furniture.
• Utility Payments like electricity bills or telephone bill.

Applicable Section for Blogging Income under Income Tax Act:

1. Section 44ADA – The benefit of section 44ADA can be taken only by those specified professionals (includes any other notified professionals) whose annual gross receipts are under Rs 50 lakh. Under the presumptive scheme of taxation, profits are presumed at 50% of the gross receipts. By following Section 44ADA, an assesse would get the following benefits: No need of maintaining books required under Section 44AA and No requirement of having accounts audited under Section 44AB.

Also Read: Beginner’s guide for understanding the basics of Income Tax

Illustration: If “A” is blogger and earning 20Lakhs and his total annual expenses are 15 Lakhs towards Rent, telephone and travelling etc. Hence we can compare net profit earned under presumptive scheme as follows:

• Section 208 – Advance Tax: Any taxpayer is responsible for paying income tax in the year that the income is paid. Blogger must pay advance tax if gross tax liability is Rs 10,000 or more in a financial year. Both taxpayers, salaried, freelancers, and companies, are entitled to advance tax. Since bloggers’ earnings are taxable in India, the advance taxes would also apply to them. The advantage of paying advance tax is that you can avoid paying undue interest under sections 234B and 234C.
• Section 139(1) – Mandatory and Voluntary Returns: Every person who has a total income that exceeds the exemption limit is liable to furnish Income Tax Return within the due date.
• Section 80C – The blogger can save tax by investing income in specified investments like mutual funds, LIC, PPF, Health insurance. The deduction for specified investment will be allowed as per limit specified in Income Tax Act.

In short the computation of income for blogger will be as under –

Particular	Amount:
Gross Income from Blogging	X
Less: Expenses as(rent expense, utility bills and expense in relation to Domain hosting)	X
Net Income:	X
Less: Deductions under (Section 80)	X
Taxable Income:	X

Conclusion: For decades, entrepreneurs have promoted their businesses through content marketing and now blogging is good way to build trust among audience through high quality content that they find relevant.