Compute TDS on gross sale of goods and services facilitated through e-commerce marketplaces (Amazon, Flipkart, Swiggy, Zomato) under Budget 2024 revised rates.
To ease working capital lockup for small e-commerce participants, the statutory TDS rate under Section 194-O has been slashed from 1.0% to 0.1% effective from October 1, 2024.
E-commerce operator must deposit TDS by 7th of next month and issue Form 16A quarterly.
Section 194-O was introduced in the Income Tax Act to bring digital market participants into the tax net by requiring e-commerce operators (ECOs) to deduct TDS on the gross amount of sales of goods or provision of services facilitated through their digital facility or platform.
Under Section 194-O(2), no deduction is required if the seller is an Individual or HUF, provided:
1. Gross sales through the platform do not exceed ₹5,00,000 during the financial year.
2. The seller has furnished their PAN or Aadhaar to the e-commerce operator.
Section 194-O has overriding precedence over Section 194Q (buyer TDS on goods) and Section 206C(1H) (seller TCS on goods). If a transaction is subject to TDS under Section 194-O, neither 194Q nor 206C(1H) will apply.
| Parameter | From 01-Oct-2024 Onwards | Prior to 01-Oct-2024 |
|---|---|---|
| Standard TDS Rate | 0.10% (Slashed by 90%) | 1.00% |
| Rate without PAN (Sec 206AA) | 5.00% | 5.00% |
| Individual/HUF Threshold | ₹5,00,000 / FY | ₹5,00,000 / FY |
| Company/Firm Threshold | Nil (TDS from ₹1) | Nil (TDS from ₹1) |
Yes. Even if the buyer makes direct payment to the seller (such as Cash on Delivery), the e-commerce operator is legally deemed to have facilitated the sale and must deduct TDS from subsequent payouts.
TDS is deducted on the gross sale amount credited to the seller. If GST is separately shown in the invoice, TDS should be deducted on the basic gross value excluding GST as per CBDT guidelines.
The deducted TDS appears in the seller's AIS / Form 26AS. The seller can claim 100% credit or a bank refund when filing their annual income tax return (ITR-3 or ITR-4).