TDS 194R and GST on influencer payments: what brands must do

Brands in India must deduct 10 percent TDS under section 194R on benefits given to creators, including free products they keep, once those benefits exceed ₹20,000 in a financial year. Creators must register for GST once annual turnover passes ₹20 lakh, and then charge 18 percent on their fees. Since 1 April 2026 the Income-tax Act 2025 has applied to payments, with TDS provisions consolidated in section 393.

That is the short version, and it hides three things that matter. Cash fees are less settled than benefits. The section number for 194R after the 2025 Act comes from tax blogs, not the statute text we could read. And the GST treatment of free products is unsettled. This guide separates what we can source from what we cannot, and ends with worked examples and a document checklist. It is written for brand and finance teams. For the wider picture of costs, see our influencer rates guide, and for the channel as a whole, our complete guide to influencer marketing in India.

The short version for finance teams

Section 194R in plain English

Section 194R was added to the Income-tax Act 1961 with effect from 1 July 2022. As summarised by TaxGuru from CBDT Circular 12 of 2022 (dated 16 June 2022), it requires 10 percent TDS on a benefit or perquisite given to a resident in the course of business or profession, whether or not it can be converted to money, once the total in a financial year exceeds ₹20,000.

Four points do most of the work:

• Who deducts. Any business or professional that gives the benefit. A brand giving creators products, trips or gifts as part of marketing is within scope. Individuals and HUFs are exempt where their prior-year business turnover is up to ₹1 crore, or professional receipts up to ₹50 lakh. As summarised, the exemption is for individual and HUF payers only, so a company, LLP or firm deducts regardless of size.
• Who receives. A resident. This guide does not cover payments to non-resident creators.
• When it applies. Once the total value of benefits in the financial year goes over ₹20,000. It is the total of everything you give that creator in the year, not each campaign separately.
• How it is valued. At fair market value: the brand's purchase price for goods it buys, or its selling price for goods it makes.

For benefits in kind, the summary says the payer should collect a declaration and the advance tax challan details, so the tax is covered before the product is released.

Kept versus returned

The summary's influencer example is the one most brands need. A product sent for a shoot and returned after the work does not attract 194R. If the influencer keeps it, 194R applies. That is why product returns belong in your contract and your logistics tracker. A return policy you cannot prove is not a return policy.

The part we cannot settle

The summary says tax applies "once the total exceeds ₹20,000". It does not say whether the 10 percent is on the whole value or only on the amount above ₹20,000. The cautious reading is the whole value, and our examples use it. Ask your CA which reading to apply and why.

The Income-tax Act 2025 and section 393

The Income-tax Act 2025 came into force on 1 April 2026, and the Income-tax Rules 2026 were notified on 20 March 2026, according to the Income Tax Department's press release. TDS provisions are consolidated into section 393. Payments made on or after 1 April 2026 follow the 2025 Act.

Tax blogs, including one on TDS under section 393(1), map old 194R to section 393(1), table serial 8(iv), still at 10 percent and ₹20,000. We did not open the statute text, and one practitioner flagged that some thresholds changed in selected cases. So treat the 393(1) reference and the ₹20,000 figure as claims to check, not as settled citations. In your internal notes, write both: "194R (old) / 393(1) 8(iv) (per tax blogs, CA to confirm)". Ask your CA what to print on challans, certificates and returns.

Cash fees: 194J, 194C or 194R

This is where we are least certain. Section 194R covers benefits and perquisites. A cash fee for a Reel is payment for a service. Some commentators say cash fees to influencers fall under 194J (professional or technical services) and others under 194C (contract work), and some attribute influencer-specific guidance to a different CBDT circular. We could not resolve this from the sources we could open, and we do not state a rate for 194J or 194C because our sources do not give one. One booking-platform guide says brands carry a 10 percent TDS obligation on creator fees, which is the figure to test with your CA.

What to do:

1. Ask your CA to choose the section for cash fees to individual creators and document the reasoning.
2. Apply it the same way to every creator, so that your treatment is consistent.
3. Do not leave it out. "We are not sure" is not a reason to skip TDS entirely.
4. Separate cash and benefit lines in the contract so each can be handled correctly.

With an agency, there are usually two layers: the agency invoices you, and the agency pays creators. In our process, creators are paid after deliverables are verified, with TDS deducted as applicable, and the brand pays one invoice. Ask your CA how TDS applies on your side to an agency invoice that includes pass-through creator fees, so there is neither a double deduction nor a gap. Our guide to choosing an influencer marketing agency lists the payment questions to ask before you sign.

GST on creator invoices

GST is the creator's obligation, but you pay it and need valid invoices. According to a CA's summary, influencer services attract 18 percent GST, SAC 998361. Registration is required once annual turnover passes ₹20 lakh, or ₹10 lakh in special-category states; CBIC material confirms the thresholds, though its pages are several years old and the list of special-category states has changed over time.

According to the same summary, turnover includes brand deals, AdSense, affiliate income and free products at market value, and barter is taxable at market value. Exports of services can be zero-rated with a Letter of Undertaking. CBIC Circular 38/12/2018 records an exemption for interstate service providers below the threshold, so an unregistered creator in another state can invoice you without GST.

We found no CBIC clarification specific to influencers, free products or barter. Treat the free-product question as unsettled and ask a CA.

What a valid creator invoice includes

Ask your CA whether TDS is computed before or after GST when GST is shown separately on the invoice. The usual practice is to compute it on the fee before GST. That point is not in the sources we reviewed, so confirm it.

Worked examples

All examples assume a 10 percent rate for illustration and the cautious whole-value reading of 194R. The cash-fee TDS section is unresolved, as explained above. These are illustrations, not tax computations.

Documents to collect

• PAN of the creator (and of the entity if they work through one)
• Signed contract that states fees, benefits and whether GST is extra
• Tax invoice with GSTIN where registered, SAC and place of supply
• Bank details and a name that matches the invoice
• For benefits in kind: a declaration of the product value and the creator's acceptance, plus advance tax challan details where the tax has been paid by the creator
• A record of each product's purchase price and shipping proof, and a return receipt where a product comes back
• A running ledger of benefits per creator per financial year, so you notice when ₹20,000 is crossed

A simple process for each campaign

1. At brief stage, list which creators receive cash, product or both, and the value of each. Our campaign brief template has a field for it.
2. In the contract, state fees as exclusive of GST, name who deducts TDS and list the documents due. Our influencer contract guide covers the clauses.
3. Before payment, check the PAN, invoice and GST status. Check the running benefits ledger.
4. At payment, deduct as your CA has set out and keep a record of the amount and the basis.
5. After payment, deposit the tax, issue the certificate and file the statement. Your CA has the calendar.
6. At year end, reconcile benefits per creator against what you deducted.

How sure are we, topic by topic

Mistakes we see

• Treating barter as free. A kit worth ₹15,000 a year is not tax-free for either side in all cases.
• Counting per campaign. The ₹20,000 test is for the whole financial year, so it can be crossed in the third campaign without anyone noticing.
• No PAN. Paying a creator without a PAN invites a conversation with your CA about higher rates and delays.
• GST confusion. An unregistered creator should not charge GST, and a registered creator should not leave it off.
• Values nobody recorded. For a product, the brand's purchase price is the number that matters. Keep the invoice.

We handle creator payments with TDS as part of each campaign, and the right treatment for your own brand is a question for your CA. If you would like creator payments, contracts and tax handled in one workflow, see how we work and our pricing, or send us a brief. For gifting and seeding specifically, read the barter collaboration guide and see our gifting and seeding service. To estimate the creator-fee side of a budget before tax, use the influencer cost calculator.

This is general information, not tax advice.