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Google does not deduct tax on your AdSense payment. Nothing appears in Form 26AS. Your Annual Information Statement stays quiet. The money arrives, and no paperwork ever follows it.

That silence is not permission. It is a reporting obligation that sits entirely on you.

I run a network of monetised properties, and the compliance side of that has been considerably more work than the publishing side. What follows is the structure I wish someone had explained on day one, written for bloggers rather than for accountants.

Before Anything Else, Check Who Actually Pays You

Almost every article on this subject assumes your AdSense payments come from abroad. That assumption drives the entire GST answer, and it is not always correct.

Open your AdSense account, go to Payments, then Settings, and check the contracting entity listed on your payment records.

If you are paid by Google Asia Pacific Pte Ltd (Singapore) or Google Ireland Ltd, your service is being supplied to a recipient outside India. That is an export of service, and the GST treatment described later in this article applies.

If your account is contracted with Google India Pvt Ltd, the supply is domestic. GST at 18 per cent applies once you are registered, and tax may be deducted at source, which means the income should also appear in your Form 26AS.

Check this once. Then check it again if you ever change your payment address or tax residency. Everything downstream depends on the answer.

AdSense Is Business Income, Not Income From Other Sources

This is the classification that shapes everything else.

AdSense revenue is taxed under the head Profits and Gains of Business or Profession, usually shortened to PGBP. It is not income from other sources, and it is not passive income in the legal sense, however passive it feels while you are asleep.

There is no special rate. AdSense earnings are added to your total income and taxed at your applicable slab rate.

The practical effect is that the law regards you as running a business. That brings obligations around books of account, advance tax, and possibly GST registration. It also brings one significant benefit: the right to deduct genuine business expenses.

Bloggers who report AdSense under income from other sources forfeit that benefit completely.

Which ITR Form To File

Two forms matter, and the choice depends on how you want to compute profit.

ITR-4, also called Sugam, is for bloggers using the presumptive taxation scheme. It is short and requires no detailed financial statements.

ITR-3 is for bloggers who maintain books of account and claim actual expenses. It is longer and requires a profit and loss statement along with a balance sheet.

Either way, the business code is 16021, covering content creators, bloggers and vloggers. This code became mandatory in ITR-3 from Assessment Year 2025-26. Filing under a generic advertising or services code invites avoidable questions.

Deadlines For Assessment Year 2026-27

Assessment Year 2026-27 covers income earned during Financial Year 2025-26, and the deadlines this year are staggered by category rather than uniform.

Reported dates are 31 July 2026 for salaried filers using ITR-1 and ITR-2, 31 August 2026 for non-audit business and professional filers using ITR-3 and ITR-4, and 31 October 2026 for audit cases.

The 31 August date for ITR-3 and ITR-4 is a recent change, and separate deadlines by category are new enough that it is worth confirming the current position on the Income Tax Department portal before you rely on it. Deadlines in India also get extended mid-season with some regularity. Treat the earliest date as your working target and any extension as a bonus.

One structural point that has caused genuine confusion. The Income Tax Act, 2025 came into force on 1 April 2026. The return you file this year, however, covers Financial Year 2025-26, and that year remains governed entirely by the Income Tax Act, 1961. The new legislation applies from the following year onward.

Route One: Presumptive Taxation Under Section 44AD

Section 44AD lets small businesses declare a fixed percentage of turnover as profit and skip detailed bookkeeping.

For receipts through banking channels, the rate is 6 per cent of gross receipts, with a turnover ceiling of 3 crore rupees provided cash receipts stay below 5 per cent of the total.

AdSense arrives exclusively by bank transfer. The 6 per cent rate and the higher ceiling therefore apply automatically to a blogger earning only from AdSense.

The advantages are real:

No requirement to maintain detailed books of account
No tax audit within the prescribed limits
Advance tax payable in one instalment by 15 March instead of four

The trade-off is that no separate expense deduction is allowed. The 6 per cent figure is deemed to be profit after every cost you incurred.

There is also a lock-in. If you opt into Section 44AD and later declare profits below the presumptive rate, you lose access to the scheme for the following five assessment years.

The Caveat Most Guides Skip

There is an unresolved disagreement about whether AdSense income qualifies for Section 44AD at all.

The argument against runs like this. AdSense is paid in exchange for displaying advertisements on your property, which gives it the character of commission income. Commission and brokerage are expressly excluded from Section 44AD. They are also outside Section 44ADA, which covers only notified professions. On that reading, a blogger would have no presumptive route available.

Most practitioners continue to file bloggers under Section 44AD, and the position is widely accepted in practice. It has not, however, been settled to the point where you should stake a large liability on it. If your receipts are substantial, get a written opinion from a chartered accountant on your specific facts rather than relying on what everyone else does.

Note separately that Section 44ADA does not apply to bloggers. The 50 per cent presumptive rate is restricted to professions notified under Section 44AA(1), and blogging is not among them.

Route Two: Books Of Account And Actual Expenses

For anyone running several properties, this route is frequently the better one. AdSense margins look extraordinary on paper. The cost of actually operating a content network is not.

Deductible expenses typically include hosting and content delivery, domain renewals, themes and licensed plugins, SEO and analytics subscriptions, payments to freelance writers and editors, internet charges, an apportioned share of workspace electricity, depreciation on laptops and equipment, professional fees, and paid promotion.

Books become mandatory under Section 44AA once income exceeds 2.5 lakh rupees or turnover exceeds 25 lakh rupees.

Tax audit under Section 44AB applies once turnover crosses 1 crore rupees, extended to 10 crore rupees where both cash receipts and cash payments remain below 5 per cent of their respective totals. Audit is also triggered if you declare profits below the presumptive rate after having opted into Section 44AD, provided your total income exceeds the basic exemption limit.

What The Two Routes Actually Cost

Numbers make this clearer than any amount of explanation. Take a blogger with 40 lakh rupees of gross AdSense receipts in Financial Year 2025-26, filing as a resident individual under the default new regime.

Under Section 44AD, deemed profit is 6 per cent of 40 lakh rupees, or 2,40,000 rupees. That falls below the 4 lakh rupee nil-rate threshold. Tax payable is zero.

Under actual books, assume genuine expenses of 12 lakh rupees, leaving a net profit of 28 lakh rupees. Applying the Financial Year 2025-26 new regime slabs, tax works out to roughly 4,20,000 rupees before cess, and about 4,36,800 rupees after the 4 per cent health and education cess. The rebate under Section 87A does not apply, since income exceeds 12 lakh rupees.

The gap is enormous, and that is precisely why the presumptive scheme deserves careful thought rather than casual adoption.

The Mismatch Problem Nobody Warns You About

Here is the trap embedded in that comparison.

If you declare 2,40,000 rupees of income under Section 44AD while genuinely earning 28 lakh rupees, you will eventually want to spend that money. Property registration, large investments, high-value purchases and significant credit card spending are all reported to the department and surface in your Annual Information Statement.

A declared income of 2,40,000 rupees sitting beside a property purchase of 60 lakh rupees is a mismatch that gets noticed. The presumptive scheme is a genuine simplification, not a mechanism for making income disappear, and using it that way builds a problem that arrives three years later with interest attached.

If you are earning at scale and intend to deploy that money visibly, the books route is often the more comfortable long-term position even though it costs more today.

GST On AdSense Income

This is where bloggers are caught out most often.

Assuming a foreign contracting entity, AdSense revenue qualifies as an export of service under Section 2(6) of the IGST Act. Exports are zero-rated, so no GST is charged on them.

Zero-rated is not the same as outside the system.

Registration becomes mandatory once aggregate turnover from all supplies crosses 20 lakh rupees in a financial year, or 10 lakh rupees in special category states. AdSense counts towards that threshold even though it is zero-rated. Registration is required within 30 days of crossing it.

Once registered, four obligations follow.

File a Letter of Undertaking in Form RFD-11 at the start of each financial year. This permits export without paying IGST upfront. Without it, you must pay IGST first and claim a refund afterwards, which locks up working capital for no reason.

File GSTR-1 and GSTR-3B on schedule, reporting AdSense under zero-rated supplies.

Claim input tax credit on hosting, software and equipment, and claim refund of the accumulated credit.

Keep remittance evidence for every payment received. Most authorised dealer banks no longer issue physical Foreign Inward Remittance Certificates. What you will actually receive is a Foreign Inward Remittance Advice or an electronic Bank Realisation Certificate, depending on your bank. Ask your relationship manager which one they issue and set up a routine to collect it, rather than discovering the gap during a refund claim.

Reconcile your AdSense payment report against your GSTR-1 every month. It takes twenty minutes, and it prevents the kind of cumulative drift that becomes unfixable after a year.

Domestic income follows different rules entirely. Direct ad sales, sponsored posts and guest posting fees billed to Indian companies attract GST at 18 per cent, as do affiliate commissions from Indian networks.

Advance Tax

If your total tax liability for the year exceeds 10,000 rupees, advance tax applies.

Under the regular route, instalments fall due at 15 per cent by 15 June, 45 per cent by 15 September, 75 per cent by 15 December and 100 per cent by 15 March.

Under Section 44AD, the whole amount is payable in a single instalment by 15 March.

Missing these attracts interest under Sections 234B and 234C. Individually small, and quietly compounding across years.

Records Worth Keeping

Because Google reports nothing to Indian authorities, your own documentation is the only evidence you will have when a query arrives.

Retain the following for at least six years, given the extended reassessment window available to the department:

AdSense payment reports for each complete financial year
Bank statements showing the corresponding rupee credits
Remittance advices or Bank Realisation Certificates for foreign receipts
Invoices raised to Indian brands and affiliate programmes
Expense receipts and equipment purchase invoices
GST returns and Letters of Undertaking, if registered

Two Points That Are Easy To Miss

Foreign tax credit on YouTube earnings: If your AdSense account also carries YouTube revenue, earnings attributable to United States viewership are withheld at source. Submitting Form W-8BEN reduces that rate to 15% under the India-United States tax treaty. To claim tax credit already withheld, file Form 67 before or along with your return. Website AdSense revenue is not subject to this withholding.
Choice of tax regime: The new regime is now the default. A business income earner who wants the old regime must file Form 10-IEA before the return due date. Having moved out of the new regime and then returned to it, you cannot opt out again while you continue to have business income. This is not the annual choice salaried taxpayers enjoy, so model both regimes properly before committing.

Did You Know

The 6 per cent presumptive rate did not always exist. Section 44AD originally applied a single rate of 8 per cent regardless of how the money arrived. The reduced 6 per cent rate for receipts through banking channels was introduced by the Finance Act 2017, as a deliberate nudge towards digital payments in the period following demonetisation. Bloggers, paid entirely by bank transfer, ended up as accidental beneficiaries of a policy aimed at shopkeepers.

Closing Thought

Compliance should scale with income. A blogger earning two lakh rupees a year from occasional payouts genuinely has simpler obligations than someone operating a portfolio of monetised properties.

The classification, though, never changes. AdSense is business income from the first rupee, and the reporting responsibility belongs to you alone. Building the habit while the numbers are small is very much easier than reconstructing three years of records under a notice.

This article is general information, not tax advice. The treatment of AdSense income under Section 44AD in particular remains a contested question, and deadlines are subject to change. Consult a qualified chartered accountant regarding your circumstances.