Taxability of Income for Indian Instructors on Udemy in the year 2025

CA_Abhishek
CA_Abhishek Posts: 39 traveler rank
in Introductions

Income earned by Indian instructors from teaching online courses on platforms like Udemy is generally taxable as business or professional income in India. Therefore, instructors must report their earnings as business income on their tax returns and pay taxes at the applicable rates.

Deductions for Business Expenses
Instructors can claim deductions for expenses incurred in earning this income, such as:

  • Course creation and promotion costs
  • Internet and phone expenses
  • Other business-related expenses

However, the tax treatment of income from Udemy may vary based on individual circumstances. For example, instructors operating as sole proprietors, members of a partnership, or as a private limited company might face different tax implications.

It is highly recommended that Indian instructors earning from Udemy seek professional advice from tax experts or the Indian tax authorities to ensure compliance with tax laws.

GST Applicability for Udemy Instructors
Income earned by Indian instructors in foreign currency from courses sold globally through Udemy is considered an export of service under the GST Act.

For GST purposes, an export of service must meet the following criteria:

  1. Service is provided from India to a recipient outside India
  2. Payment is received in convertible foreign exchange

As income from Udemy courses meets all these criteria, it qualifies as an export of service, which is exempt from GST in India.

While GST is not applicable on such income, instructors are required to file a GST return and claim the exemption for the export of services. It’s advisable to consult a chartered accountant or tax professional to ensure proper GST compliance.

Benefits of Proper Accounting
Proper accounting is crucial for instructors to ensure compliance with both Income Tax and GST laws. Key benefits include:

  • Compliance: Avoid penalties and fines
  • Transparency: Build trust with stakeholders
  • Tax Planning: Minimize tax liabilities
  • Informed Decision Making: Assess business performance for future investments
  • Record Keeping: Maintain organized and efficient records
  • Financing Opportunities: Secure financing by providing accurate financial data

Note: This information is for general guidance and is not intended as legal or tax advice. Tax laws are subject to change, and it's recommended to consult with a chartered accountant or tax professional for personalized advice.

Thank you,

Tax2save.in
Founder: CA Abhishek Jain

#Udemy #IncomeTax #GSTCompliance #TaxAdvice #OnlineInstructors #TaxPlanning #BusinessIncome #Accounting #FinancialManagement #Tax2Save

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