Is income earned from third party advertisements like adsense taxable in India?
A famous blogger or website can earn a lot from adsense. Adsense is the advertisement application by Google.
Bloggers earn money by displaying google adsense ads on their blogs.
Do the bloggers have to pay service tax on their income?
Is income tax applicable to bloggers for adsense or any other third advertisement income?
Do Google deduct tax (TDS) from the money paid to publishers?
A Service tax notification exempted the income from advertisements from Service Tax. The notification states that service tax is not to be levied on sale of space in print media, bill boards, buildings, cell phones, ATM Machines & Internet.
As the new service tax regime has specifically stated that Service Tax is not chargeable on the sale of space for advertisements on the Internet, website owners and bloggers are exempted from paying Service Tax in India.
Income tax is applicable on all earnings, except few. The income earned from adsense is taxable and should be reported under the head "Income from Business and profession or Other Sources".
Google does not deduct tax, TDS laws are applicable to companies (assesee) registered in India. Adsense payments are initiated by Google US and not by Google India. Adsense business is not handled by Google India.
The notification exempts advertising space on Internet etc. Affiliating marketing is not about selling advertisement space but you work as an agent.
You sale on behalf of the seller, and earn commission.
Service tax will be applicable for affiliating marketing. But you need not to pay any service tax till your revenue touch 10,00,000 (10 Lakhs) in a year (April to March).