The tax filing time is about to come in India. Many people from India are not sure on what sort of tax liability they have with respect to their Google Adsense earnings.
Are Adsense earnings taxable in India?Yes. Adsense earnings are taxable in India. You can club these earnings your your business/professional income if this is your main source (or one of the main source) of income. If it is just your part time income and/or you are a salaried person, then you can club this income into income from “other sources.” Clubbing it with “income from other sources” may not be quite beneficial to you. Why? Read on.
Do I need to pay service tax on Adsense earnings in India?No. In India, if you are running a website and selling/renting out space for advertising to somebody and getting paid for it, you are required to pay the service tax. But in this case, you are not renting the space, but Google is doing it for you. Google is collecting money from the advertisers and giving you the commission. Google is already paying service tax in India, so you don’t have to pay it. Else it would be a double taxation scenario.
Can I deduct my expenses from my Adsense income while calculating the earnings?If you have added Adsense income in your “Income from business and profession”, then you can get your expenses deducted. For example, phone bills, electricity bills, internet connection bills, domain registration and hosting charges, website submission charges, advertising charges, content development payments, SEO payments, book/ebooks you bought, or any other expenses which you incurred for earning that money.
You cannot deduct your expenses when you add Adsense earnings in your “income from other sources.”
Are there any other kind of taxes on Adsense earnings?No. Just pay your regular income tax and you are fine.