Income Tax In India - 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 online activity generates money which is taxable under Indian income tax act. Though many of your online activities will be automatically charged for tax by respective payment processor like paypal 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, 2010 so if you're confused or need more information about this then you should consult charted accountant or tax adviser.

This table is based on the tax rates which are released in March 2012. If the below information is not updated then feel free to check official income tax department site for updated rate chart.

Depending on your revenue models online you need to keep some documentation for when you pay taxes. The list presented here is useful if your sole income is coming from online activities. Make sure you also list any other activity that you do offline if it's taxable.

• Keep all your direct bank deposit receipts/bank slips in photo copy. If you're getting cheques from affiliate networks then it's better to keep receipt of the deposited amount.
• You need to get PAN card when you do your online taxable activity, if you have not applied for card then get it done before you pay tax. Payment processor like paypal and some other online 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 online 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 online 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 online 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 online 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.

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