Table of Contents
- Introduction
- What Happened with Elvish Yadav?
- The Rise of Influencer Freebies & Cash Deals
- Section 194R – TDS on Freebies Explained
- Income Tax & ED Focus on Influencer Economy
- Why Brands Are Now Reluctant to Pay in Cash
- Conclusion
- FAQs
1. Introduction
The glitz and glamour of influencer life are now under the lens of tax and law enforcement agencies. One of India’s top content creators, Elvish Yadav, has landed in the spotlight again — this time not for a viral reel, but for an Enforcement Directorate (ED) summons.
The issue? Unreported income, undisclosed brand collaborations, and cash-based transactions — all now raising red flags under the Income Tax Act, especially Section 194R.
2. What Happened with Elvish Yadav?
On April 6, 2025, multiple media houses reported that Elvish Yadav was summoned by the ED in connection with an alleged money laundering investigation linked to influencer cash deals and illegal brand endorsements. While specifics are still emerging, reports suggest:
- Cash payments for promotions were not disclosed.
- Free products and services received were allegedly not reported as income.
- Associations with controversial brands drew regulatory attention.
The summons highlights how big-ticket influencers are now being watched closely by the ED and Income Tax Department.
3. The Rise of Influencer Freebies & Cash Deals
India’s influencer economy is worth over ₹1,000 crore and growing. Top creators get:
- Free gadgets, phones, designer outfits
- Paid stays in luxury hotels
- Cash deals outside official contracts
- Brand retainers and revenue shares
But how many of them report these correctly in their ITRs? That’s where Section 194R comes in.
4. Section 194R – TDS on Freebies Explained
Introduced in Budget 2022, Section 194R mandates that:
“Any person providing a benefit or perquisite in the course of business or profession must deduct 10% TDS if the value exceeds ₹20,000 per year.”
Key takeaways:
- Applies to gifts, gadgets, hotel stays, event tickets – even if no invoice is raised.
- The TDS is to be deducted by the brand/agency, not the influencer.
- Influencers receiving products must declare them as income in their returns.
If not deducted, both the giver and receiver may face scrutiny.
5. Income Tax & ED Focus on Influencer Economy
Several reports in FY 2023-24 revealed:
- Income Tax notices to 100+ influencers for unexplained cash credits.
- Scrutiny of crypto-influencers promoting unregistered tokens.
- ED investigating money laundering through fake brand deals.
The department has now linked influencers with undisclosed foreign income, GST evasion, and shell entity payments.
6. Why Brands Are Now Reluctant to Pay in Cash
Post-Section 194R and GST tightening:
- Most agencies are demanding PAN & invoice from influencers.
- Cash deals are declining due to audit risk.
- Brands are registering influencer deals under contractual service agreements.
This move toward transparency could be a major shake-up for the creator economy.
7. Conclusion
Elvish Yadav’s ED summons might be the wake-up call the influencer industry needed. As the lines between brand, business, and entertainment blur, tax authorities are stepping in to ensure compliance.
If you’re an influencer, agency, or brand:
- Understand Section 194R obligations.
- Maintain proper contracts and disclosures.
- File accurate ITRs reflecting all income, including non-cash benefits.
The age of tax-free freebies is officially over.
8. FAQs
Q1. What is Section 194R of the Income Tax Act?
It mandates 10% TDS on any benefit or perquisite given in the course of business or profession exceeding ₹20,000 per year.
Q2. Does this apply to influencers?
Yes. If influencers receive gifts, gadgets, hotel stays, etc., from brands – it qualifies as a benefit under 194R.
Q3. Who has to deduct the TDS – influencer or brand?
The brand/agency providing the benefit must deduct TDS before giving it.
Q4. What if the influencer refuses to share PAN?
The brand must deduct TDS at the higher rate of 20% under Section 206AA.
Q5. Is this connected to ED investigations?
If such income is hidden, or if money laundering is suspected, ED can probe under PMLA provisions.
Stox N Tax 
Leave a comment