Sponsorship Income Tracker

Why Track Sponsorship Income?

Sponsorship income is often irregular and comes with varying payment terms. Tracking helps you understand your cash flow, plan for tax payments, manage TDS claims, and identify payment delays. This systematic tracking is essential for accurate ITR filing and business growth planning.

TDS on Brand Payments

Brands are required to deduct 10% TDS under Section 194J on payments exceeding ₹30,000 per transaction. If you don't provide your PAN, TDS is deducted at 20%. This TDS is not a tax expense - it's advance tax that you can claim as a credit when filing your ITR. Always collect Form 16A from brands as proof.

Payment Terms Best Practices

• •Advance Payment: Negotiate 50% advance for deals above ₹50,000 to protect yourself from payment defaults
• •Milestone-based: For long-term campaigns, set clear milestones with corresponding payments
• •Net 30/60: Understand that larger brands often have 30-60 day payment cycles, plan cash flow accordingly
• •Overdue Management: Send payment reminders 5 days before due date, follow up immediately on overdue payments

GST on Sponsorships

If your annual turnover exceeds ₹20 lakhs, GST registration is mandatory. Sponsorship income from Indian brands requires you to charge 18% GST. However, if you're providing services to international brands, it may qualify as export of services (zero-rated). Always include GST clauses in your contracts.