A step-by-step guide for content creators to file income tax returns correctly

New Delhi: With India’s creator economy booming, social media influencers, bloggers, and digital content creators are under the spotlight as the Income Tax Return (ITR) filing deadline for the financial year 2024-25 (assessment year 2025-26) approaches on September 15, 2025. 

The Income Tax Department has introduced a new profession code, 16021, specifically for “Social Media Influencers” in ITR-3 and ITR-4 (Sugam) forms, acknowledging the unique income streams of this growing profession. 

Here’s a concise guide to help influencers file their ITRs correctly and avoid compliance pitfalls.

Understanding the new influencer code

The introduction of code 16021 under the ‘profession’ category in ITR forms marks a shift for influencers earning through brand endorsements, affiliate marketing, sponsored content, or digital services on platforms like YouTube, Instagram, and TikTok. 

This code, applicable in ITR-3 and ITR-4, aims to streamline tax reporting for India’s estimated 1.5 million influencers, whose collective market size is projected to hit $2.8 billion in 2025, per an IAMAI-Kantar report.

However, the classification of influencers as professionals has sparked debate. “The code lists influencers as professionals, but social media content creation isn’t a ‘specified profession’ under Rule 6F of the Income Tax Act, unlike law or medicine,” said a legal expert. 

This ambiguity means influencers must carefully choose between treating their income as business or professional earnings.

Step-by-step guide to filing ITR as an influencer

1. Determine your income type and ITR form  

Influencers must select the appropriate ITR form based on their income sources and taxation preferences:  

   - ITR-3: Ideal for influencers with complex income streams, such as brand payments, affiliate earnings, salary, capital gains, or rental income. It’s suited for those maintaining detailed books of accounts.  

   - ITR-4 (Sugam): Best for influencers opting for presumptive taxation under Section 44ADA (professional income, 50% deemed profit) or Section 44AD (business income, 8% or 6% deemed profit for digital payments), provided gross receipts don’t exceed Rs 50 lakh (or Rs 75 lakh if cash receipts are under 5%).  

Tip: If unsure, consult a tax professional to avoid misclassification, as the new code’s legal standing is unclear.

2. Verify Income with AIS and Form 26AS  

Cross-check your Annual Information Statement (AIS) and Form 26AS on the e-filing portal to ensure all income, including brand payments, affiliate earnings, and TDS deductions, is accurately reported. Discrepancies in TDS must be corrected by deductors (e.g., brands or platforms). “The tax department’s AI-driven analytics can flag mismatches, so double-check your records,” advised a legal expert.

3. Track non-monetary benefits  

Free products, services, or trips valued over Rs 20,000 in a financial year attract 10% TDS. Include these in your income calculations and ensure they’re reflected in Form 26AS.

4. Claim deductions and maintain records  

Document business expenses like equipment, internet costs, travel, or professional services (e.g., video editing) to claim deductions. While proof isn’t required during filing, retain invoices and contracts for potential scrutiny. Influencers under presumptive taxation can skip detailed bookkeeping but must declare the deemed profit percentage.

5. Check GST applicability  

If your annual turnover exceeds Rs 20 lakh (Rs 10 lakh in northeastern states), register for GST and file regular returns. Non-compliance can lead to penalties.

6. File and verify your return  

Submit your ITR on the e-filing portal (incometax.gov.in) by September 15, 2025, to avoid late fees or interest under Section 234F. Verify your return within 30 days via Aadhaar OTP, net banking, or by sending a signed ITR-V to the Centralised Processing Centre in Bengaluru.

Key challenges to watch for

- Classification confusion: The influencer code’s alignment with professional income under Section 44ADA is debated, as it lacks formal notification under the Income Tax Act. Experts suggest treating influencer income as business income under Section 44AD until the CBDT clarifies.  

- Audit risks: Influencers with gross receipts over Rs 50 lakh or income exceeding Rs 1.2 lakh may face mandatory tax audits if they opt out of presumptive taxation.  

- Documentation gaps: Many influencers lack formal contracts or fail to track expenses, risking scrutiny during assessments.