TDS 194-O for e-commerce sellers

What is TDS 194-O?

Section 194-O of the Income-tax Act makes an e-commerce operator deduct tax at source from payments to sellers on its platform. The rate fell from 1% to 0.1% of gross sales from 1 October 2024.

TDS under Section 194-O is income tax that an e-commerce operator deducts from what it pays you for sales made through its platform. The rate fell from 1% to 0.1% of the gross amount of sales or services from 1 October 2024, according to a tax article on Clause 61 of the Finance Bill 2024. It is general information, not tax advice. Confirm with a chartered accountant.

When is the tax deducted?

The same article says the operator deducts tax at the earlier of crediting your account or paying you by any mode. The base is the gross amount of sales, not your net payout after fees. At 0.1%, a ₹10,000 sale carries ₹10 of TDS. This is a worked example of the rate, not a platform statement.

The article says taxpayers argued offline transactions attracted lower rates (0.1% under Section 194Q and 0.1% TCS under Section 206C(1H)), and the cut aims for parity.

Is there a threshold, and what about PAN?

ClearTax says the operator need not deduct if an individual or HUF seller's gross sales are no more than ₹5 lakh and the seller has furnished PAN or Aadhaar, and that TDS is cut at 5% under Section 206AA if neither is furnished. That is a commentary site, not the Act, so check with your accountant. Make sure your PAN is correct in the platform's seller profile.

What is not confirmed here?

We could not open an incometax.gov.in page on this section. So we have not confirmed the threshold and PAN rule from a primary page, or any change since October 2024, including how the section is numbered under the new Income-tax Act. Check the current text before relying on this page.

What should I do each month?

Check that the platform's payout statement shows a TDS line, that the amount is about 0.1% of gross sales (or nil if the exemption applies to you), and that the same amount appears in your Form 26AS or AIS. If the figures differ, ask the platform's seller support for the TDS certificate and the order list behind it. Claim the credit in your income-tax return; your accountant will tell you which schedule it goes in.

194-O compared with GST TCS

TDS 194-O is income tax and is shown in Form 26AS. TCS under Section 52 is GST collected by the operator. Both reduce your payout before it reaches you; see settlement value and GST on marketplace fees.

Blooprint, a Bengaluru e-commerce agency, helps sellers read payout reports through Amazon account management.

Frequently asked questions

What is the current rate under Section 194-O?

A tax article describing Finance Bill 2024 says the rate fell from 1% to 0.1% of the gross amount of sales or services from 1 October 2024 (source: https://taxguru.in/income-tax/section-194-o-amendment-lower-tds-rate-e-commerce-payments.html). We did not confirm later changes from a primary page.

Is there a minimum turnover below which no TDS is cut?

ClearTax says no TDS is deducted if an individual or HUF seller's gross sales are up to ₹5 lakh and PAN or Aadhaar is furnished (source: https://cleartax.in/s/section-194o). We could not confirm it from the Act itself, so ask your chartered accountant.

Where do I see TDS deducted?

In Form 26AS or AIS on the income-tax portal, and the platform's TDS certificate. Match them with your own sales, then claim credit when you file your return. This is general information, not tax advice.