Should we pay taxes in India for Ad-sense earnings?

Show it as income from website. Pay normal income tax on it.

Most CA's have very little idea about adSense income. Most will give contradictory info.

Here is an interesting link on its treatment in India. Some people pay service tax on it if it is more than Rs 10 lakh annually. However this is inherently flawed IMHO.

Should we pay taxes in India for Ad sense earnings?

This is an issue raised by both publishers in India and the Company Google India for several years. In India Service tax is exempted for export of services. However, Service Tax department arguing that, the earnings from Ad sense is not export oriented service; hence it is liable to service tax. But the publishers and Google India rejected this argument and they were in the decision of that they should not be taxed.

However, in 2012-13 budget in India, this issue has been solved clearly. The budget 2012-13 has introduced a negative list of services that the services tax is not liable. In this list Ad sense earning has been listed as follows;

“Item No. 7.     Selling of space or time slots for advertisements other than  advertisements broadcast by radio or television;

Therefore it is now very clear that, whether it is primary or secondary earnings, Ad sense earnings are not liable for Service Tax of 12% as mentioned in the Indian Budget 2012-13

Can i have relaiable sources for your comments?

if tax is needed or not?

Any Google pages this is mentioned?

Just go to http://www.taxmanagementindia.com/visitor/detail_article.asp?ArticleID=1635 and have a look at the negative list of services that are exempted from service tax. Or else you can get the budget speech of India from a reliable government source and check whether the adsense earnings are listed in the negative list. Thanks