Taxability & Accounting of Udemy's Indian instructors' income in India

CA_Abhishek
CA_Abhishek Posts: 38 traveler rank
in Introductions

Taxability of Udemy's Indian instructors' income in India

In India, income earned from teaching online courses on platforms such as Udemy would generally be taxable as income from business or profession. This means that Indian instructors who earn income from teaching on Udemy would need to report their earnings as business income on their tax returns and pay tax on the income at the applicable tax rates.

Instructors may be able to claim deductions for expenses incurred in the course of earning this income, such as the cost of creating and promoting their courses, internet and phone expenses, and any other expenses that are directly related to the business of teaching on Udemy.

It's important to note that the tax treatment of income earned from teaching on Udemy may vary depending on an individual's specific circumstances. For example, an instructor who is registered as a sole proprietor or as a member of a partnership firm may be subject to different tax rules than an instructor who is registered as a private limited company.

I recommend that Indian instructors who earn income from teaching on Udemy consult with a tax professional or seek guidance from the Indian tax authorities to understand their tax obligations and ensure that they are complying with all relevant tax laws.

GST Applicability

In India, the income earned by Udemy instructors in foreign currency for courses uploaded by them on Udemy's e-commerce website and sold to students all over the world would be considered as an export of service for GST purposes.

Under the GST Act, export of services is defined as the supply of any service when:

The service is provided from India to a recipient outside India

The payment for the service is received in convertible foreign exchange

The service is not a taxable service as per the GST Act

As the income earned by Indian Udemy instructors from providing online courses to students in various countries meets the above criteria, it would be considered as an export of service for GST purposes.

As export of services is exempt from GST in India, the instructor would not be required to pay GST on the income earned from Udemy courses. However, the instructor will need to file a GST return and claim the exemption for export of services. It is recommended that the instructor consult with a chartered accountant or tax professional for guidance on GST compliance in India.

Benefits of Accounting

The benefits of accounting under the income tax and GST laws in India are:

Compliance: Proper accounting helps ensure compliance with the income tax and GST laws in India, which is essential to avoid any penalties or fines.

Transparency: Proper accounting helps provide transparency in the financial affairs of a business, which is essential for building trust with stakeholders such as investors, lenders, and customers.

Tax planning: Proper accounting helps in tax planning, which is the process of minimizing tax liability by optimizing the structure of a business or the timing of transactions.

Decision making: Proper accounting helps in decision making by providing accurate financial information that can be used to assess the performance of a business and make informed decisions about future investments or expansion.

Record keeping: Proper accounting helps in keeping accurate and organized records, which is essential for running a business efficiently and effectively.

Financing: Proper accounting can help in obtaining financing from banks or other financial institutions, as lenders typically require accurate financial information to assess the creditworthiness of a business.

Please note that this information provided is for general guidance only and is not intended as legal or tax advice. The tax laws and regulations in India are subject to change and it is recommended that you consult with your chartered accountant or tax professional for specific advice on your individual situation.

Thank you

CA Abhishek Jain

Comments

  • Bella
    Bella Posts: 3,694 traveler rank

    Thank you so much for sharing this information @CA_Abhishek!

  • CA_Abhishek
    CA_Abhishek Posts: 38 traveler rank

    You are welcome @Bella

  • bnnnakra
    bnnnakra Posts: 15 researcher rank

    Respected, yesterday I have submitted my course on udemy but I have doubt regarding PayPal.

    Paypal has credited me rs1.03 twice for verification of my account.

    And also it has self-choosen account type "current". How can I change that to "saving"?

    And what should I need to do further to verify my account on paypal?

  • CA_Abhishek
    CA_Abhishek Posts: 38 traveler rank

    Claiming of Foreign Tax Credit (Tax withhold by Udemy)

    ITR Filing deadline in india is approaching soon. 31.7.23 is the last date of filing ITR. Those who want to take benifit of DTAA between India and US by claiming Foreign Tax Credit (FTC) means tax withhold by Udemy as per form 1042-S ($____), please note that you have to submit FTC claim with govt. Of India before the date of filing ITR by filling form no. 67.

    Hence filing after due date will not be wise for you all. So don't wait for last date. Do filing as early as possible.

    Thanks
    Best regards
    Ca Abhishek Jain

    Website: https://tax2save.in/service/global-income-tax-filing/

  • Alfa-eLearning
    Alfa-eLearning Posts: 153 specialist rank

    @CA_Abhishek
    what is the process to claim withholding tax using 1042-S form ? My CA is not much aware of complete process. Can you please help ?

  • CA_Abhishek
    CA_Abhishek Posts: 38 traveler rank

    @Alfa-eLearning
    You can contact me using email or mobile phone to know more about claiming Udemys US withholding using 1042-s. You will get contact details on my website tax2save.in

    Thanks

    Ca Abhishek Jain

  • CA_Abhishek
    CA_Abhishek Posts: 38 traveler rank

    @Bella
    Hi Bella, I hope this message finds you well. My name is Abhishek Jain (Indian CPA), and I am reaching out to express my interest in assisting Udemy instructors, particularly those based in India, who may be facing challenges related to Income Tax and GST on their Udemy income.

    Having worked extensively on Indian tax matters, I understand the complexities that instructors might encounter. I specialize in helping individuals navigate these issues, including exploring avenues for Double Taxation Avoidance Agreement (DTAA) relief. My goal is to provide support to Udemy instructors so they can efficiently manage their tax obligations and maximize their income. I am already working with several instructors in India, ensuring they comply with local tax regulations and optimizing their financial outcomes.

    If possible, I would appreciate it if you could refer me to Indian instructors who might be interested in such assistance. I am confident that together, we can create a positive impact on both Udemy and its instructors.

    Thank you for considering my proposal. I am looking forward to the possibility of collaborating with Udemy and its valued instructors.

    Thanks

    CA Abhishek Jain

    caabhisheksjain@gmail.com

  • zealvora
    zealvora Posts: 34 trailblazer rank

    @CA_Abhishek Can you share if Udemy Income can fall under presumptive taxation of either 44AD or 44ADA?

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