To be able to comply with the new law (mentioned below), brands need to have the PAN card of each influencer they are collaborating with. OPA will collect and share it with the brands you collaborate with.
What is the new Law?
The Govt. of India introduced a new section 194R (as amended by Finance Act 2022) in the Income-tax Act, 1961 under Finance Act 2022 with effect from 1st July 2022 which mandates a person providing any benefit or perquisite to another person for their business/profession, to deduct tax at source @ 10% of the aggregate of the value of such benefit or perquisite. The benefit or prerequisite may be in cash or kind. In case, the aggregate value of the benefit for a financial year is less than Rs. 20,000, TDS is not applicable under this section. Click here for more details.
How it works?
For example, Social media influencer Abc receives a mobile phone worth Rs. 1,18,000 (mobile phone 1 lakh plus GST 18,000) from Company X, Car worth Rs. 15 lakh from Company Y and Cosmetics worth Rs. 15,000 from Company Z. Abc charges fees of Rs. 15,000 to Company X, Y, Z each. Now, Abc promotes all these products and retains the mobile phone and cosmetics with her. She returns the car to Company Y after the promotion.
Since Abc has not returned the products to Company X and Z, it would be considered as benefit or perquisite provided for the purpose of business/profession. Company X shall deduct TDS under Section 194R on the value of the mobile phone excluding GST. TDS liability would be Rs. 10,000 which shall be retained from the fees payable to Abc. For Company Z, the value of benefit provided does not exceed Rs. 20,000 and hence no TDS liability would arise to Company Z. For Company Y, the car is returned by Abc hence, there is no benefit which is provided to Abc over and above the fees charged by her and hence no requirement to deduct TDS.
Where to submit your PAN card?
Follow the process below to submit your PAN number:
Go to the OPA app
Click on <Your Account> on the home page
Click on <Edit Account>
Then Click on <Account details>
You will see the pan card section at the bottom of the page.
What if I don't have a PAN card?
In case a PAN card was never issued under your name, then you may share your mother or father’s PAN card, whoever's income is higher.
What if neither you nor your parents have a PAN card?
As a company we have to comply with the guidelines issued by GOI according to which all the influencers have to submit PAN card details.
Do influencers have to pay TDS?
No, not in the case of OPA. For every collab with OPA, brands will be paying the TDS from their own pocket and no TDS amount will be demanded from Influencers.
What if a brand doesn’t pay TDS to govt?
It wouldn’t affect you. The brand will be held liable by the government. TDS full-form is ‘Tax Deducted at Source’ and Brand is the source in this scenario. Hence it was always the brand’s responsibility.
Where will TDS deduction happen from?
For example, we send you a campaign with Plum for a payout of Rs.1000. If you complete the deliverables on time, OPA will pay you the promised Rs.1000 in full. However, if TDS is applicable, Plum will actually be incurring a cost of Rs.1111. Where-in Rs.111 will go to the government as TDS on the influencer’s behalf. And the rest of Rs.1000 will go to the influencer as promised.