Influencers Paying TDS Could Make Social Media Reliable: Here’s Why
From skin care products to front row seats at a fashion show to vacations, influencers get all the freebies they desire. And now, India’s TDS rule might just shed some light on the murky world of influencer marketing.

Influencers, just like the other people in this country, have to pay their tax which is deducted at source. The income that they receive is already deducted and the amount is dependent on the income earned which dictates the rate of the tax deducted at source.

The Central Board of Direct Taxes has put out a public notice saying that influencers will now have 10% of their earning deducted at the source. This will only however be applicable if they keep the product they are endorsing for advertising or promotion. However, if the product is given back to the company after the influencer has promoted, there will be zero TDS attached to it.

All social media platforms, whether it is Instagram or Twitter is now saturated with various types of influencers for all types of products and services. Many influencers even promote and shed light on specific industry as they build a name for them in that specific sector. Many influencers receive the products they receive and many are entitled to keep these products and promote them on their social media pages. Influencers are now everywhere on social media and there is almost no chance of you encountering one of their posts as you scroll through your feed.

However, many influencers are not very genuine with they promote and don’t really look into the authenticity of what they are promoting or the brand they are supporting. Many of them endorse products and support companies for the money they get and not because they actually like the product and believe in it. This makes it very difficult for people to trust influencers and the products they endorse and the companies they support.

However, with the governments new tax rules, it could mostly weed out many ingenuine promotions and advertising. This law is set to come into effect on the 1^st of July. This is mainly being brought in to widen their tax base.

However, the tax will not be applicable to the influencers who return the product. This is mainly done to ensure that the people who are gaining from product promotions, report it in their tax report and pay the due fees. This will even help businesses with their product and it will become a bit easier to find influencers who are genuinely interested in the product so that the promotions are much more honest and people and potential can trust the advertising done by the influencer.