What Is Google Tax or Equalisation Levy?

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Did you heard about “Google Tax” or “Amazon Tax” or “Flipkart Tax” or “Equalisation Levy” after union Budget 2016? Do you know how these new tax will impact you as a blogger? In this article I will share about the latest tax rules which is going to hit your blogging income or digital marketing income from next financial year onward.

What is Google Tax?

Honorable Finance Minister Mr. Arun Jaitley has introduced a new tax on the income as accrue to a foreign e-commerce company outside of India. This is named as Google Tax or ‘equalisation levy’ in India. Mainly this tax will apply to foreign companies who has not registered to India.

Now onward, if you are trying to get tax exemption by showing various business expenditure, then you have to make sure that such services are already charged this new Google tax. Otherwise, you will not be able to declare the exemption.

How much Tax one have to pay under New Google Tax

As per the news, if you are paying more than Rs 1 lakh for availing various services for the benefit of your business like advertisement then you will be liable to pay a 6% gross payment as Google tax. It sounds like TDS (Tax Deducted At Source) that you have heard many times while doing a FD scheme in bank.

Services will be effected under this Google tax Rule

So far there are many assumptions about which services will be considered under this new Google tax regime. Few of them are disclosed in economictimes so far are like

  • Online advertising
  • For storage (web hosting) or distributing digital content.
  • Use or right to use or download online movies, music, games etc.
  • Service related to online transactions like payment gateways etc.
  • Online news, Online search, online maps or GRP applications.
  • Online software applications downloaded

Will Google Tax Applied on Your Adsense Income?

Just after declaring this new Google Tax, an uncertainty spread among many bloggers who are making money online with Google adsense program. But there is nothing to worry for any adsesne publishers. As the tax will be applied on to advertisers who are spending more than 1 lakh in a year.

E.g. If you are spending 3 lakh on digital media for promoting your brand or product, then you have to pay 6% of 3 Lakh or 18,000 as Google Tax to Govt of India.

Impact of Google Tax on Digital Media Industry

Now the biggest concern is how this new Google Tax will impact on this huge Digital media industry in India, which is growing day by day. In simple terms, it is easily understandable that as a start up owner or business owner we have to bear this extra cost only. That means in coming day the cost of advertising will definitely go up.

I would love to know what is your understanding and reaction as a blogger or start up owner after listening to new Google Tax norms? Share your views and any further information you want to add here by writing a simple comment below to make this article worthy for our readers.

Comments (5)

  • Hi Santanu,
    The day before yesterday I heard about Google tax from some source but was not knowing that deeply. And also thanks for the recent visit to my blog and also thanks for the informative post.

  • Thank you santanu for this post, as a blogger living in India, we should aware this kinda stuff.

    • Author

      Yes, Income tax related stuffs are really complex in India and one can make things simple by gathering more knowledge only.

  • I have heard about Google tax, but never got a chance to get details about it. Thank you for sharing the detailed about Google tax in India.

    It is really necessary to know when and how your earning get deducted.

    I really enjoyed learning this.

    Thank you for sharing!

Comments are closed.