The old sections and where they went
The Income-tax Act, 2025 replaced the 1961 Act from 1 April 2026. TDS provisions were gathered into one section with tables, so the section numbers people quote have changed even though the common rates have not.
| Old section | New table entry | What it covers | Rate | Threshold |
|---|---|---|---|---|
| 194J | Sl. 6(iii) | Fees for professional services | 10% | Above ₹50,000 in the year |
| 194J | Sl. 6(iii) | Fees for technical services | 2% | Above ₹50,000 in the year |
| 194C | Sl. 6(i) | Contract work | 1% to an individual or HUF, 2% to others | ₹30,000 single payment or ₹1,00,000 in the year |
| 194R | Sl. 8(iv) | Benefit or perquisite, including barter you keep | 10% | Above ₹20,000 in the year |
| 194H | Sl. 1(ii) | Commission or brokerage, which can include affiliate commission | 2% | ₹20,000 |
Payments made or credited on or before 31 March 2026 stay under the old Act. Serial numbers vary slightly between published summaries, so check the official text if you need to quote a row.
Why two brands deduct different amounts
There is no single line in the Act that says "influencer". Many finance teams book a sponsored post as a professional fee and deduct 10%. Others treat it as contract work at 1% or 2%, partly because the old contractor provision expressly listed advertising as work. So one brand taking ₹10,000 from a ₹1,00,000 invoice and another taking ₹1,000 can both be following their own reasoning. Check how the purchase order describes the payment. If you think the classification is wrong, raise it before the invoice, not after.
Thresholds are per brand, not per creator
The limits above apply to what one payer pays you in the year. A first ₹30,000 deal may have no TDS at all, although many brands deduct from the start if they expect to cross the limit later. Individuals and HUFs that are not under tax audit, such as a small proprietor, generally fall under a separate entry at 2%, once their total payments cross ₹50 lakh in the year. That is why a small shop usually pays you in full.
What an invoice looks like after tax
| Line | Amount |
|---|---|
| Taxable value | ₹1,00,000 |
| IGST at 18% | ₹18,000 |
| Invoice total | ₹1,18,000 |
| TDS at 10% on the taxable value | −₹10,000 |
| Reaches your bank account | ₹1,08,000 |
Neither deduction is lost in the way it first appears. The GST was never yours, it passes through you to the government. The TDS is an advance against your income tax, credited to your PAN, and you claim it when you file. Check that it appears in your Annual Information Statement on the income-tax portal. The invoice generator does this arithmetic for you, including the state split.
Barter and free products
A product you keep is a benefit. If benefits from one provider cross ₹20,000 in the year, 10% applies to their value. GST is not included in that value. You cannot deduct tax out of a lipstick, so the provider has to make sure the tax is paid before releasing the benefit: it may pay it itself or ask you to show advance tax paid.
A product you return is different. CBDT Circular 12 of 2022, issued under the old section 194R, says a product used to make the content and then returned to the manufacturer falls outside the provision, and a product you keep does not. Ask your CA how this applies under the new Act. If you are registered for GST, barter can be a taxable supply too. More in our guide to barter collabs.
GST for creators
- When to register: generally once aggregate turnover crosses ₹20 lakh in a financial year, or ₹10 lakh in the special category states of Manipur, Mizoram, Nagaland and Tripura. Count all your income, including platform payouts such as AdSense and barter at fair market value, not just cash brand deals.
- What to charge: 18% on work for Indian brands, added on top of your fee.
- Which GST: CGST plus SGST when you and the brand are in the same state, IGST when you are not.
- Foreign payers: income from foreign platforms and brands is often treated as a zero-rated export, usually with a Letter of Undertaking filed each year. The rules here are genuinely fiddly, particularly for digital services, so this is a good place to spend money on a CA.
- SAC code: 998361, advertising services, is commonly used for sponsored content. Published guides do not all agree, so have your CA confirm it.
What to put on your invoice
Your name and PAN, GSTIN if registered, the brand's name and GSTIN, place of supply, the deliverables, the usage term, the taxable value and tax lines, and the amount in words. Being specific about the deliverable also helps the brand's finance team classify the payment correctly.
Income tax on what is left
Creator income is taxed under the normal slab system. The presumptive schemes for small businesses and professionals, formerly sections 44AD and 44ADA, have moved to section 58 of the new Act. Whether a creator counts as a business or a specified profession for those schemes is not something we can settle for you, so ask a CA before relying on either.
Sources
- Income Tax Department: section 393, Income-tax Act, 2025 (official text, PDF)
- Income Tax Department: FAQs on tax deducted at source
- TaxGuru: section 393 of the Income-tax Act, 2025
- OneFinOps: old section to section 393 mapping, FY 2026-27
- PwC India: CBDT guidelines on section 194R (Circular 12 of 2022)
- Tax Garden: GST compliance for freelancers, creators and influencers
- TaxAj: GST and income tax for influencers and content creators in India
Rates and thresholds here are drawn from published professional summaries of the Act. Read the official text before relying on a specific row. This page is general information, not tax advice, and a chartered accountant should confirm your own position.