The income-tax department in India has recently initiated a probe into social media influencers and content creators on platforms like YouTube and Instagram. The probe arises from allegations that these influencers are not displaying their income and profits in a manner that aligns with their earnings. Last week, the department conducted searches on about 10 YouTubers and other influencers in the state of Kerala. These individuals, mostly young artists and actors, have been found to be making substantial earnings, which they are either not reporting or under-reporting in their income tax returns. This discrepancy can be attributed to their lack of knowledge about tax laws. Social media influencers and online content creators possess significant influence over their audiences, allowing them to shape opinions and purchasing decisions. During the search process, the tax department treated the individuals in Kerala with great care, ensuring their cooperation. The department has also issued notices to determine the precise tax liability of these individuals. The investigation extends beyond Kerala, as the department is scrutinizing the social media activities of celebrities and other influencers across different regions of the country. The tax department has acquired crucial information on these influencers and content creators, including details of brand endorsements, paid and unpaid promotions, expenditure records, and their earning models on platforms such as YouTube and Instagram. Additionally, the department has leveraged the tax deducted at source (TDS) database in its pursuit of tax evasion cases. Last year, the Central Board of Direct Taxes (CBDT) introduced new provisions for TDS regarding benefits received in a business or profession, stipulating that these benefits could be in cash or in kind, or a combination of both. The recent budget further introduced Section 194R in the Income Tax Act, which mandates a 10% tax deduction at source for any person providing benefits or perquisites exceeding Rs 20,000 in a year to a resident arising from their business or profession. As the investigation continues, the income-tax department aims to enforce tax compliance among social media influencers and content creators.