In the era of social media and globetrotting influencers, imagine embarking on an exhilarating international adventure, capturing breathtaking moments and sharing them with the world through various social media platforms. The photos gain traction, attracting comments and reaction but amidst all this, a surprising notification from the Income Tax Department appears in your inbox, plunging you into panic.

In a recently revealed list, prominent fashion influencers, a lifestyle and fitness coach, vacation influencers, and a Bollywood-focused influencer have been handed notice from the Income Tax Department with allegations of potential fraud. Three of these individuals, according to the official, had not submitted any IT reports, whereas the others had forged the numbers in their income. They kept their identities a secret. Apart from this, thirty of the influencers, who publish content on YouTube, Instagram, Twitter, and other social blogging platforms, according to the official, are being scrutinised. The official gave an example of a Mumbai-based fashion influencer who was paid between Rs 50,000 and 1 lakh for a single Instagram post supporting high-end makeup goods.

The official said that the influencer had filed a Rs 3.5 lakh annual income despite receiving over Rs 30 lakh for numerous posts from a single brand. Additionally, she had received gifts of high-end goods from the business. Income tax officials searched 10 YouTubers in Kerala last week, including a local actress. The social media influencer industry was valued at Rs 900 crore in 2021, according to The Influencer Marketing Report 2022, and is expected to reach 2,200 crore by 2025. According to industry sources, micro-influencers in India with 10,000–50,000 followers get paid between Rs 5,000 to Rs 30,000 for each brand promotional post. Celebrities and mega bloggers, with more than 500,000 followers, can charge between Rs 15,000 and Rs 40,000.

Those earning over Rs 20 Lakh in a fiscal year must register their services under the goods and services tax law as such services are classified as Online Information and Database Access or Retrieval Services (OIDAR). Under GST, services are taxed at 18%.

As of July 1, 2022, freebies and incentives obtained from brands for promotions must be subject to a 10% tax that must be withheld at the source (TDS) per Section 194R of the Income Tax Act. The availability of TDS, according to officials, has made it easier for them to monitor the revenue of social media influencers.