Earning online feels informal, but tax rules still apply. This article lists the topics to understand and discuss with a professional. It is general information, not tax advice, and rules change.
Income tax
Affiliate earnings are income. You report them in your income tax return, typically as business or professional income or other income depending on your situation. Your total income determines what you owe.
TDS
Payers in India may deduct tax at source (TDS) on certain payments, including commissions, when thresholds are crossed. TDS is credited against your PAN and shows in your tax statements. Check your Form 26AS or Annual Information Statement and claim it when you file.
GST
GST registration may be required once your aggregate turnover from services crosses the applicable threshold, which differs for some states, or in other specific situations. Some publishers register voluntarily. Ask a CA whether and when you need to register.
Record keeping
- monthly payout statements
- payment references for each payout
- invoices issued, if any
- expenses such as equipment, software and internet
Questions to ask your CA
- How should my affiliate income be classified?
- Which expenses can I claim?
- Do I need GST registration now or later?
- How do I account for TDS deducted by payers?
- Do I need to pay advance tax?
Payment details on M2E
M2E pays to verified bank or UPI details in your name. Keep your payment details accurate, and make sure the name matches your PAN and bank records.
Common expenses publishers track
Depending on your situation and your CA’s advice, expenses related to your affiliate work may be relevant, such as:
- a phone, camera or microphone used for content
- editing software and design tools
- internet and mobile data
- hosting and domain costs for a blog
- paid courses that improve your skills
Keep invoices and receipts organised by month.
Simple monthly routine
- Download or note your payout statement.
- Match each payout to your bank or UPI statement using the payment reference.
- File invoices for expenses.
- Note any TDS shown in your tax statements.
A few minutes each month saves hours at filing time.
When to get professional help
Consider speaking to a chartered accountant when:
- your affiliate income becomes regular
- you receive payouts from several platforms
- you are unsure about GST
- you also have salary or other business income
Keep it honest
Report all income accurately. Under-reporting can lead to notices and penalties. Clear records protect you if you ever need to explain your income.
Key takeaway
Treat affiliate income like any other income: keep records, understand the basics and get professional advice for your situation.
Frequently asked questions
Is affiliate income taxable if it is small?
Income is taxable according to income tax rules regardless of how it is earned. Whether you owe tax depends on your total income and circumstances.
Do I need GST registration to start?
Not always. It depends on turnover thresholds and other conditions. A chartered accountant can tell you whether it applies to you.
What records should I keep?
Payout statements, payment references, invoices if any, and expenses related to your affiliate work.
Start earning with M2E
Create a free publisher account, apply to campaigns that suit your audience and get your own tracking link for each one.
Become a Publisher