Adsense Income Taxable in India?

Nowdays there are lot of people who are earning via Youtube or Websites. And according to IncomeTax laws in India, the Adsense income is taxable like any other income but the way how the Adsense income is calculated differs from the salary or business income in India. The Adsense income doesn’t attract GST for Advertising as it’s generally paid by Google when advertisers pay to Google for the ads.

Google generally shares some certain % of revenue with publishers both of Youtube & Websites and that is paid to the Youtube Channel owners or the Website owners. Let us see below under what section of IncomeTax act applies to Google Adsense.

Section 44 AD / Section 44ADA : These sections of IncomeTax act are specifically for those people who have income from Business or Profession. This scheme can be adopted only if you satisfy the below conditions

  • Residential Individual
  • Resident Hindu Undivided Family
  •  Resident Partnership Firm

And also the income should not exceed more than 2 crores per year to claim Tax under this scheme.And this scheme can’t be adopted by taxpayers who claim deduction under 10A/10AA/10B/10BA or under sections 80HH to 80RRB.

How Adsense Income qualifies for 44AD?

  • Adsense is not a profession, it’s a Business Income
  • Adsense income is mainly from Advertisements on the Website or on the Videos and it falls under the category 16006 under Section 44AD

When you declare Adsense income under Section 44AD, your income is presumed to be 6% of your total receipts and you have to pay Income Tax on 6% of the total income. If the income exceeds 2 crores per year then it needs to be audited