Calculate your Tax Liability on Income from Google Adsense

Indian professionals and website owners are joining a list of their global peers in earning income through sale of advertisements via Google's AdSense program. But being a new income head, there has been confusion over the tax treatment of such earnings. Foremost thing of AdSense receipts for Indian residents is that the income is taxable in India. It can be shown either under the head 'Income from Business or Profession' or under 'Income from other sources'. The deciding factor in this case shall be the nature of work of AdSense publisher. If he is maintaining the blog/ website on regular basis then it can be shown under his professional while if it is just a part time job and receipts are low, the income can be shown under latter head. The advantage with showing earnings under Income from profession is that one can claim all expenses related to earning the income as deductions. So, expenses like Telephone/ Broadband expenses, advertisement expenses [1], books and magazine subscriptions, staff salary expenses, online services [2], web design [3], traveling expenses among others would be deducted from professional receipts reducing the tax liability. Apart from this, one can also claim depreciation expenses on purchase of car, computer and other capital items. (more...) [4][1] http://www.labnol.org/internet/favor...periment/1635/[2] http://www.labnol.org/internet/offic...nteresting/55/[3] http://www.labnol.org/internet/desig...e-custom/1179/[4] http://www.labnol.org/india/law/calc...831/#more-1831