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Music royalties are taxable income in India — your streaming and royalty earnings are treated as income and you owe tax on them, just like any other earnings. There are three pieces to understand: income tax, TDS (tax deducted at source), and GST. This is a plain-English overview to help you ask the right questions — it is not tax advice, and you should confirm specifics with a chartered accountant.
Income tax on royalties
Royalty income is added to your total income and taxed at your applicable slab rate. Most independent artists report it as income from their profession or business. Keep clean records of your distributor payouts and any expenses (gear, software, marketing) — legitimate expenses can reduce your taxable income.
TDS — tax deducted at source
Under Section 194J of the Income Tax Act, royalty payments to residents attract TDS of 10% (and 20% if you haven't given your PAN), once payments cross the threshold (₹50,000 in a financial year for FY 2025-26 onward). If TDS is deducted before you're paid, it isn't lost — you claim credit for it when you file your return, and it's adjusted against your final tax.
GST on royalties
GST can apply to royalty and licensing income once your total turnover crosses the registration threshold (around ₹20 lakh per year for most states; ₹10 lakh in some special-category states). The treatment of copyright and royalties under GST has nuances and exemptions depending on who earns it and how — this is exactly the kind of detail a CA should confirm for your case.
What to actually do
- Get a PAN and keep it on file with your distributor so TDS stays at 10%, not 20%.
- Track every payout and business expense through the year.
- Once your income is meaningful, work with a chartered accountant — especially on GST registration and filing.
For where the money comes from first, see how distributor payouts work and how much Indian artists earn. This article is general information, not tax or legal advice.