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TMI BlogTDS Applicability on Payments Made to Social Media InfluencersX X X X Extracts X X X X X X X X Extracts X X X X ..... TDS Applicability on Payments Made to Social Media Influencers X X X X Extracts X X X X X X X X Extracts X X X X ..... romotional activities. If TDS is applicable, under which section of the Income Tax Act should the deduction be made? Regards, S Ram Reply By YAGAY andSUN: The Reply: Yes, TDS is applicable on payments made to social media influencers for promoting your products. The Income Tax Department has issued specific clarifications on this matter, especially in light of the increasing use of digital in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fluencers for marketing. The applicability of TDS depends on the nature of the arrangement and whether the influencer is providing services as a professional or in kind (e.g., receiving free products instead of monetary payments). 📢 Nature of Service: Engaging social media influencers typically involves: * Promoting your product or service through posts, videos, reviews, or reels. * ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Creating and sharing content on platforms like Instagram, YouTube, Twitter, etc. * This constitutes a professional service involving personal brand value and promotional skill. ✅ TDS Applicability: 🔹 Section 194J - Fees for Professional or Technical Services Applicable when: * The influencer is a professional (content creator, marketing expert, etc.) providing services for a f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee or consideration. * This is the most common case when a company pays influencers for marketing or brand promotion. 🔹 TDS Rate: * 10% on the amount paid (excluding GST, if shown separately). 🚨 CBDT Clarification (Circular No. 12 of 2022 - dated 16.06.2022) The CBDT clarified that when social media influencers receive a product and retain it after promotion (e.g., mobile ph ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one, apparel, cosmetics), and it's consideration for the service rendered, TDS under Section 194R (not 194J) may apply. So we have two scenarios: Scenario Applicable Section TDS Rate Influencer is paid in money for promotion Section 194J 10% Influencer is given products as consideration (retains the product) Section 194R 10% (no threshold if benefit > Rs.20,000/year) If the product ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is returned after promotion and not retained, 194R does not apply. ✅ Summary Table: Particulars Details Nature of Service Product promotion by influencer If Paid in Money TDS under Section 194J @ 10% If Paid in Kind (Product Retained) TDS under Section 194R @ 10% Exemption Threshold for 194J Rs.30,000 per FY per influencer Exemption Threshold for 194R Rs.20,000 aggregate benefit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per FY per influencer GST Exclusion? TDS under 194J is on base amount, excluding GST if shown 🧾 Example: * You pay an influencer Rs.50,000 for an Instagram campaign: * Deduct TDS @ 10% = Rs.5,000 under Section 194J. * You give an influencer a Rs.25,000 smartphone to review and retain: * Deduct TDS @ 10% = Rs.2,500 under Section 194R (deducted in kind, or paid by company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if not recovered from influencer).
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