Question 1

How is a YouTube channel or Instagram account valued for sale?

Accepted Answer

Channel valuation uses multiple methods: **Subscriber-based** (Rs 20-100 per subscriber depending on engagement quality), **Revenue multiple** (2-5x annual revenue, higher for stable recurring income), **EBITDA multiple** (3-8x for monetized business channels), and **Asset-based** (content library value + audience). Premium channels with branded content and high engagement command the highest valuations.

Question 2

Is selling a YouTube channel treated as capital gains or business income?

Accepted Answer

The classification depends on how the asset was held. If the channel is a **self-generated intangible asset held as investment** for more than 36 months, it may qualify for **long-term capital gains (20% with indexation)**. If treated as stock-in-trade or business asset, it's taxed as **business income at slab rates**. The distinction significantly impacts tax liability - consult a CA for proper classification.

Question 3

What is Section 54EC and how can it save tax on channel sale?

Accepted Answer

Section 54EC allows you to **invest up to Rs 50 lakh** in NHAI/REC bonds within 6 months of sale to claim capital gains exemption. The bonds have a **5-year lock-in period** and earn around 5-5.5% annual interest. Maximum tax savings: Rs 10 lakh on Rs 50 lakh investment (20% of invested amount). This only applies to long-term capital gains.

Question 4

Should I take cash or stock (equity) in a channel acquisition deal?

Accepted Answer

**Cash sale** provides immediate liquidity and certainty but triggers immediate tax liability. **Stock swap** may qualify for tax deferral (tax triggered only when you sell acquired shares) and lets you participate in buyer's growth, but carries illiquidity and market risk. A **mixed structure** (cash + stock + earnout) can balance immediate needs with tax optimization and upside participation.

Question 5

How does holding period affect tax on channel/brand sale?

Accepted Answer

Holding period is crucial! If held for **more than 36 months**, gains qualify as **long-term capital gains** taxed at 20% with indexation benefit (which reduces taxable gain by adjusting for inflation). If held for **less than 36 months**, gains are **short-term** and taxed at your income tax slab rate (up to 30% + cess). Planning your exit timing can significantly impact net proceeds.

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