TDS Applicability on Payments Made to Social Media Influencers

[Ramanathan Seshan]

Dear Experts,

We engage social media influencers for the promotion of our products. Kindly clarify whether Tax Deducted at Source (TDS) is applicable on payments made to such influencers for such promotional activities. If TDS is applicable, under which section of the Income Tax Act should the deduction be made?

Regards,

S Ram

AI Summary

Social Media Influencers Face New Tax Rules: TDS Applies to Monetary Payments and Product Compensation Under Sections 194J and 194R Social media influencers' promotional services are subject to Tax Deducted at Source (TDS). When influencers receive monetary payments, TDS applies under Section 194J at 10% rate with a Rs.30,000 annual exemption. If influencers retain products as compensation, TDS falls under Section 194R at 10% with a Rs.20,000 annual threshold. Companies must deduct TDS based on the nature of compensation provided to influencers.