If you are an Indian content creator earning income from YouTube, it is important to know how your earnings will be taxed and how to report them in your ITR. Following the correct process can help you avoid reporting errors and potential scrutiny.
Isha Sekhri, Founder, Isha Sekhri & Associates LLP, explains how creators should calculate, report, and comply with tax rules on their YouTube earnings.
According to Sekhri, Rule 206 of the Income-tax Rules, 2026 prescribes the telegraphic transfer (TT) buying rate for converting foreign-currency income into rupees.
āIt prescribes the telegraphic transfer (TT) buying rateānot the TT selling rate, a generic āGoogle rateā or the rate your bank actually credited you at,ā she explained.
For YouTube/AdSense earnings, treated as business income, the applicable rate is the TT buying rate on 31 March of the relevant financial year, as published by SBI or another authorised dealer bank.
According to Sekhri, payments from Google outside India qualify as an āexport of servicesā under Section 2(6) of the IGST Act. This makes AdSense income zero-rated under GST, with eligible input tax credit or refunds available.
Sekhri said, āNo Indian TDS is deducted on the AdSense/YouTube Partner Program payment.ā
However, US withholding tax can apply to the portion of YouTube earnings linked to US viewers. She advised Indian creators to submit their US tax information through AdSense to claim the 15% India-US treaty rate, instead of the higher default 24%-30% withholding rate.
Sekhri said YouTube/AdSense earnings are considered business income for a creator running this as a regular activity. Her illustration for FY 2025-26 assumes:
Under the FY 2025-26 new-regime slabs, tax on ā¹38.67 lakh works out to ā¹7,40,100, plus 4% cess of ā¹29,604, taking the total tax liability to ā¹7,69,704.
After adjusting ā¹4,000 in domestic TDS and approximately ā¹1.47 lakh as foreign tax credit for US withholding, the illustrative net tax payable is ā¹6.18 lakh.
According to Sekhri, YouTube/content-creator income is classified as āProfits and Gains of Business or Profession,ā rather than āIncome from Other Sourcesā.
ITR-3 is generally applicable when a creator maintains regular books and claims actual business expenses, particularly where foreign income or foreign bank details need to be disclosed.
Sekhri also outlined the key business expenses that creators can claim as deductions.
According to Sekhri, creators should report gross AdSense/YouTube earnings and domestic brand income as business receipts, after converting foreign income into rupees as prescribed.