Influencers rush to seek help with taxes and financial planning

Independent content creators who have seen a surge in earnings are turning in droves to financial advisors, wealth managers, and certified public accountants (CAs) to avoid tax issues and plan investments in everything from financial instruments and real estate to startups.

“The general theme we have learned while working with content creators’ portfolios is that capital inflows at their end are slightly inconsistent,” said Sandeep Jethwani, co-founder of wealth management platform Dezerv. Dezerv, which manages money for some of India’s top content creators, did not name its clients.

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India ₹Influencer market expected to reach Rs 2,344 crore ₹3,375 crore by 2026, growing at a compound annual growth rate of 18%, according to the ‘State of Influencer Marketing in India’ report by consultancy firm EY.

The career is unpredictable and longevity is a major concern like most other entertainment and sports related careers.

“The volatility of their capital inflows makes them worry about their lifespan and while they are making money, they want to save significantly,” Jethwani said. Most creators invest in financial assets and startups. They also buy other assets like land and property.

Shivani Kapila Tyagi (aka Littleglove), who has 17.6 million followers on social media platforms YouTube and Instagram, said risk appetite and investment tendencies are subjective for each influencer. “But younger people are likely to invest in tangible assets, while older people like us are more focused on long-term investments, including investing in other businesses and financial instruments.”

With an average monthly income of ₹As per the hype cycle, Tyagi invests 40% of his revenue in creating more content. He invests around 15% in financial instruments, including stocks and mutual funds.

One of the key requirements for influencers is to understand tax rules.

Under Section 194R of the Income Tax Act, which came into effect in July 2022, social media influencers are required to pay 10% tax deducted at source (TDS) on gifts or any other form of payment made in kind if the value of the product is more than ₹20,000.

Since content creation is legally considered a sole proprietorship, influencers with an annual turnover of more than ₹Hitesh Rupapara, a tax consultant from Surat, said the 20 lakh should also register for goods and services tax (GST) and start paying taxes from then on. His firm HJ Rupapara and Associates handles the taxes of several influencers from Gujarat and Maharashtra with over a million followers.

Financial advisors also help save taxes and maximize wealth creation for influential people.

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“What may be leisure for me and you, for example, travelling, is an expense for a travel influencer. The expenses related to the same, including camera and equipment, have to be subtracted from their income when they take care of their finances to avoid taxes on the same,” said a senior executive of a Delhi-based private bank that handles influencers as clients. According to him, the average income of mega influencers easily exceeds ₹10 lakh monthly, which puts them in the top tax bracket of 30%, but their lifestyle expenses reduce their taxable income to lower brackets.

Although they may have no idea about taxes or investments at first, some creators are making the effort to learn.

“When I crossed a certain income threshold, I was asked to register for GST, something I had never done before. Also, I was finding it difficult to manage finances while creating content, so I had to hire a CA to help me,” said Isa Khan, a travel content creator with 995,000 followers on his Instagram account @khan.isa. “I wasn’t very familiar with financial investment options, so that was also a reason for me to approach the CA, but now I started reading up on the topic because I got interested in investing.”