Freelancers & Creators
How YouTube and creator income is taxed in India
AdSense, brand deals and US withholding explained, plus the expenses you can claim and questions for your CA.
By Aditya Kulkarni4 min read
Creators often treat YouTube money as a bonus that sits outside the tax system. It does not. AdSense payouts, brand integrations, memberships and affiliate commissions are all income, and in most cases they are income from a business or profession rather than “income from other sources”. That distinction decides what you can deduct and which return you file. This piece covers FY 2025-26 (AY 2026-27).
What kind of income it is
If you make videos regularly to earn money, the tax department will see that as an organised activity: business or professional income, taxed at your slab rates along with your other income. Two consequences follow:
- You can deduct genuine expenses of making content.
- You need a return that supports business income, not the simplest salaried form.
The harder question is which kind. Some sections give special treatment to “specified professions” such as film artists or technical consultants, and it is not settled whether a YouTuber falls into that list. Many creators report as a business, either under the presumptive scheme for businesses or with regular books. Your choice affects the deemed-profit rate and your record-keeping, so get a CA’s view on your specific content before you file the first time.
How AdSense money reaches you
YouTube pays Indian creators through Google AdSense, contracted with Google Asia Pacific in Singapore. Two things follow from that.
First, US tax. Google withholds US tax on earnings attributed to viewers in the United States. If you submit your tax information in AdSense, declaring that you are an Indian resident, you can claim the lower rate under the India-US tax treaty instead of the higher default rate. If you have never filled in this form, do it now; the difference is real money every month.
Second, foreign tax credit. US tax withheld on income that India also taxes can be claimed as a credit against your Indian tax. To do that you must file Form 67 on or before your income-tax return and keep proof of the tax withheld, such as the statements Google provides. The credit is generally limited to the Indian tax on that same income, so it reduces your bill rather than creating a large refund.
Brand deals from Indian companies
Indian brands and agencies will usually deduct TDS, often under 194J at 10% for professional fees or under 194C at 1% for content production, depending on how they classify the work. That TDS shows up in Form 26AS and the AIS and is claimed in your return. Products you keep from brands are a separate topic, covered in our article on section 194R.
What you can deduct
Expenses must be incurred wholly for your channel. Typical examples:
- cameras, lenses, lights, microphones and computers (claimed through depreciation over years, not all at once)
- editing software and music or stock subscriptions
- the business share of internet and phone bills
- fees paid to editors, thumbnail designers and managers
- props, sets and travel for specific shoots
Personal spending dressed up as content cost is where creators get into trouble. If a holiday was a holiday, it is not a business expense because you posted a vlog.
A worked example
Imagine Riya, a cooking creator, has these figures for FY 2025-26 under regular books:
| Item | Amount |
|---|---|
| AdSense receipts | ₹6,00,000 |
| Brand deals (gross, before TDS) | ₹4,00,000 |
| Total receipts | ₹10,00,000 |
| Expenses and depreciation | ₹2,10,000 |
| Profit | ₹7,90,000 |
The ₹7,90,000 profit is added to any other income she has and taxed at slab rates. If her brand deals carried 10% TDS, ₹40,000 is already paid towards her tax. If Google withheld US tax on her US viewership, she files Form 67 first and claims that as a credit.
GST and advance tax
GST is a separate question. Creator services are generally taxed at 18% once you are registered, and registration becomes mandatory when aggregate turnover crosses ₹20 lakh. Whether AdSense income qualifies as an export of services depends on the export conditions being met, which is worth confirming with a CA.
Because creator income arrives without much TDS on the AdSense side, advance tax often applies. If your tax for the year, after TDS, is ₹10,000 or more, you pay it in instalments by 15 June, 15 September, 15 December and 15 March.
Your creator tax checklist
- Submit tax information in AdSense so the treaty rate applies.
- Download monthly AdSense statements and keep them with bank credits.
- Keep bills for gear, software and freelancers.
- File Form 67 before your return if US tax was withheld.
- Ask a CA how your content should be classified, once, and then stay consistent.
General information, not tax advice. Rules change, so check the latest rules or speak to a CA before you act.