Tax Guide for Indian Affiliates, Bloggers and Marketers

If you’re a blogger, marketer or affiliate then you need to know about income tax if your on-line activity generates money which is taxable under Indian income tax act.

Though many of your on-line activities will be automatically charged for tax by respective payment processor like pay-pal or other shopping cart solutions but other than that you need to keep your tab on taxable income. Information in this hub is based on the new tax slabs which are applicable from April 1, 2013 so if you’re confused or need more information about this then you should consult charted accountant or tax adviser.

Things you need to keep for Income Tax Accounts

Depending on your revenue models on-line you need to keep some documentation for when you pay taxes. The list presented here is useful if your sole income is coming from on-line activities. Make sure you also list any other activity that you do off-line if it’s taxable. See if you can get any service that tax files for you and give you advice every step of the way. I can’t vouch for any site or service, so it’s upto you to find out.

  •  Keep all your direct bank deposit receipts/bank slips in photo copy. If you’re getting cheque from affiliate networks then it’s better to keep receipt of the deposited amount.
  •  You need to get PAN card when you do your on-line taxable activity, if you have not applied for card then get it done before you pay tax. Payment processor like pay-pal and some other on-line sites require you to fill PAN number otherwise payments are not processed.
  •  If you earn more than 500- US $ per month for one year consistently then you’re taxable citizen as per Indian taxation.
  •  Keep on-line payment processor transaction history in printable form. You can print out summary of yearly transactions to keep record of payments before submitting tax information.
  •  If you’ve donated to charity on-line which is tax deductible under Indian tax act then you should keep a copy of that activity as well.
  •  Consult your tax adviser or charted accountant for more information related to medical reimbursement. If you’re individual full-time on-line marketer then you need to know what provisions are there for your medical tax deductions which may or may not be available to you as proprietor owner.

There are some types of income which are tax deductible so you need to keep track of it if that is applicable to you in anyway. Do pay attention to rebates and deduction in tax, keep a book to track if any of your on-line activity generates deductible income. If you’re marketing religious or charitable trust then the income earned is tax deductible, do consult your tax-adviser about this.

Tax Deduction Saving Scheme for Freelancers, Affiliates Marketers and Self Employed

You can save tax by investing into one of these safe investment schemes.

  •     Public Provident Fund (PPF)
  •     National Savings Certificate (NSC_
  •     National Pension Scheme (NPS)
  •     Senior Citizen Savings Scheme investments.
  •     5 year Tax Deductible Fixed Deposit in Govt or Non Govt Bank.

For more tax deduction, you may want to check out sections 80C, 80D, 80DDF, 80E of Income Tax. There are many other investment methods which are tax deductible but some of them are risky and also have their lock in periods and clause. So I suggest checking tax deductible bonds, saving schemes and other options that could help you. But make sure you at-least make use of the five listed investment schemes to save your money.

Summary – You need to keep receipts of all income generated through your on-line and off-line activity if it passes the taxable income. If you’re unsure or confused about tax then consult your tax adviser or charted accountant.