Social Media Influencers Must Now Disclose Earnings Under New ITR Code

It is no secret that in recent years, India’s influencer economy has exploded, with social media influencers and digital content creators earning sustainable sums of money. Such growth is definitely not going unnoticed by the authorities, with the same now becoming the focus of income tax authorities.

The recently introduced Income Tax Bill, 2025, has endeavoured to bring social media influencers under the tax net, subtly hinting towards increased scrutiny in the ever-expanding digital ecosystem.

So, if you are a content creator earning through social media platforms, there are a few things you must know about the recently introduced tax regime.

For the first time, the Income Tax Return (ITR) for Financial Year 2024–25 (Assessment Year 2025–26) has included a special profession code 16021 for social media influencers.

This means that if you are someone who has been earning through social media through various ways, including promotions, product endorsements, or digital content creation, you will have to use this code while filing your ITR. This definitely marks a notable move in recent times, as previously, there was no such designated classification for influencer income.

Once the profession code is in place, the next crucial step for influencers filing their ITRs is choosing the correct form. Influencers must choose between ITR 3 or ITR 4 (Sugam). ITR 3 is used if income is from a business or profession under the regular scheme. It also includes other income sources like salary, capital gains, and property income.

Otherwise, ITR 4 (Sugam) is used, which is applicable to individuals opting for the presumptive taxation scheme, a simplified method of paying tax that allows professionals to declare a fixed percentage of income and avoid maintaining detailed books.

The presumptive taxation scheme under Section 44ADA is for professionals whose total income in a financial year is up to Rs 50 lakh, or up to Rs 75 lakh if less than 5 per cent of the payments are in cash.

This applies to professions like law, medicine, engineering, architecture, accountancy, technical consultancy, interior design, and any other profession officially notified by the government.

In contrast, Section 44AD is meant for businesses. It allows eligible businesses to declare income at a presumptive rate of 8 per cent, or 6 per cent if the payments are mostly received digitally. It can be used if the gross turnover does not exceed Rs 2 crore or Rs 3 crore, where cash receipts are within 5 per cent of total receipts.

Chartered Accountant Himank Singla, Partner at S.B.H.S. & Associates, while speaking to LawBeat, said, “Influencers earning income from brand collaborations, promotions, or digital content typically fall under the category of professional income taxable under the head 'Profits and Gains of Business or Profession" (PGBP). If the influencer opts for presumptive taxation and has no other complicating factors like capital gains or foreign income, they can file their return using ITR-4. However, if the influencer has additional sources of income such as capital gains (from shares, crypto, or property) along with presumptive income or he alternatively altogether chooses to maintain books of accounts and report actual profits, then ITR-3 becomes the appropriate form."

"In essence, ITR-4 is meant for simple presumptive cases, while ITR-3 is suited for more comprehensive reporting involving multiple income heads or detailed accounts," Singla added.

However, there is confusion because the new code has been placed under the profession category, but content creation is not mentioned in the list of specified professions under Rule 6F of the Income Tax Act. This has led to uncertainty about whether influencers should file under Section 44ADA or Section 44AD.

"Influencers are not expressly notified as such under Section 44AA(1) read with Rule 6F, which is a requirement for claiming presumptive taxation under 44ADA. Until recently, I was filing influencer returns using business code 21008 and availing benefits under Section 44AD instead."

"Some argue influencers could qualify as ‘film artists’, but that interpretation is debatable as film artists under the Act include specific roles like actors, directors or editors, not general content creators. This ambiguity has created genuine uncertainty whether influencers should still use Section 44AD as before or now shift to 44ADA despite not being formally notified. In my view, a clear clarification from the CBDT is urgently needed to ensure consistent and compliant treatment going forward,”Singla added

Advising caution, Singla said,"...Skip ITR-4 for now. If you're unsure, go with ITR-3, and either maintain books or cautiously opt for presumptive under 44AD using a broader business code, until the CBDT decides to clear the fog."

"With the evolving nature of digital professions and rising compliance monitoring, basic bookkeeping is no longer optional; it's your first line of defence, "CA Himank Singla added.

Tax experts also suggest taking a moment to cross-check your Annual Information Statement (AIS) and Form 26AS on the e-filing portal, just to make sure all your earnings, like brand deals, affiliate income, and any TDS deductions, are correctly reflected.

While the influencer economy is booming like never before, one thing is clear: the income tax department is paying close attention. It is, therefore, non-negotiable to stay updated with CBDT notifications. Whenever in doubt, consult a Chartered Accountant to ensure full compliance.

Inputs from Business Today