Income Tax on Adsense Income in India
Under which “Head ” Income from Adsense will be calculated ?
Income under the Adsense will be calucated under the head ” Profit and Gains from Business and Profession “
How to take Adsense income for calculating Income Tax on Adsense Income ?
The total income earned from Adsense during a financial year would be added up.
Financial Year 2014-15 would be from 1st April 2014 to 31st March 2015
Financial Year 2015-16 would be from 1st April 2015 to 31st March 2016 ]
Thus if you have earned income during 01.4.2014 to 31.03.2015 (i,e FY 2014-15) you have to pay Income tax
Can I deducted expenses which are incurred for earning adsense income ? if yes, What are the expenses that can be deducted from Adsense Income while calculating Income Tax on Adsense Income?
Any expense incurred for earning revenue are deductible.Following are examples of few expenses that can be deducted from Adsense Income to arrive at your profit
- Hosting Expense
- Domain Renewal Expense
- Telephone Expense / mobile phone exp
- Internet Expense / Broadband Exp
- Electricity expense
- Salary Expense
- Website development expense
- Fuel expense
- Meeting Expense
- Content writer expense
- Depreciation on Assets (Computer , car, Bike used for business )
- Rent of Office
How to Calculate Net Profit from Adsense Income ?
Total Revenue from Adsense during Financial Year (e.g during FY 2015-16 ) Rs
Less Total Expenses for earning Adsense Earnings during FY Rs
Less Depreciation on Assets (Depreciation rates as per Income tax act ) Rs
Net Profit from Adsense Earnings during FY Rs
How to pay Tax on Adsense Income ?
If you are Individual/ Proprietor :-
The Net profit earned from Adsense (under the head “Profit and Gains from Business and Profession “) and Income earned from other heads of Income (i.e under the head Salaries ,House Property ,Capital Gains , Other Cources) during a financial year would be added up and tax would be levied as per the Income Tax Slab Rates in force. The Income Tax Slab Rates are announced by the Finance Minister in the Budget and keep on changing every year. The current income tax slab rates are mentioned in this link INCOME TAX RATES FOR FY 2015 16 AS PER FINANCE ACT 2015
Should I maintain the books of accounts also if I earn Adsense Income ?
Yes , if your adsense earnings exceeds Rs 120000 during Financial year , you have to maintain your books of Accounts as these can be asked by Income tax officer.
Should I take the help of professional if I earn Adsense Income ?
Yes, CA (Chartered Accountants ) are recommended for advice on Income Tax on Adsense Income.