0.1% income tax TDS by Amazon/Flipkart/Zomato on seller sales. ₹5L threshold for individuals. SEPARATE from GST TCS Section 52 (1%). Both apply — reconcile each.
SECTION 194O = TDS by E-COMMERCE OPERATOR on seller (participant) sales. RATE: 0.1% (reduced from 1% — current 0.1%) on GROSS sales value. WHO DEDUCTS: Amazon, Flipkart, Meesho, Zomato, Swiggy, etc. THRESHOLD: individual/HUF sellers with sales ≤ ₹5L (with PAN) — NO TDS. Above ₹5L: 0.1% TDS. NO PAN: 5%. SEPARATE from GST TCS Section 52 (1%). KEY: income tax TDS, not GST.
TWO SEPARATE LEVIES on e-commerce sellers: (1) INCOME TAX TDS 194O: 0.1% by operator on sales. Credit in ITR. (2) GST TCS Section 52: 1% by operator on net sales. Credit in GST return. BOTH apply to same transaction! EXAMPLE: ₹10L Amazon sales. (a) 194O TDS: 0.1% = ₹1K (income tax). (b) GST TCS: 1% = ₹10K (GST). (c) Seller claims both credits separately. STRATEGIC: e-commerce sellers track both — reconcile income tax (26AS) + GST (2A) credits.
194O ₹5L THRESHOLD: (1) INDIVIDUAL/HUF sellers: NO TDS if gross sales ≤ ₹5L per FY (AND PAN/Aadhaar provided). (2) Above ₹5L: 0.1% on full amount. (3) COMPANIES/firms: NO threshold (TDS from rupee one). (4) NO PAN: 5% TDS. EXAMPLE: individual selling ₹4L on Etsy/Amazon = NO 194O TDS. ₹8L sales = 0.1% × ₹8L = ₹800 TDS. STRATEGIC: small individual sellers below ₹5L exempt from 194O (but GST TCS still applies if registered).
SELLER 194O COMPLIANCE: (1) PROVIDE PAN to platform (avoid 5%). (2) Platform deducts 0.1% + deposits. (3) Reflected in Form 26AS. (4) CLAIM credit in ITR. (5) Reconcile with platform statements. (6) GST registration separate (TCS Section 52). (7) FILE ITR (business income — ITR-3/4). PRESUMPTIVE: 44AD (6%/8% deemed profit) for eligible. STRATEGIC: e-commerce sellers reconcile 194O (income tax) + GST TCS + platform commission. Multiple deductions — track carefully for accurate ITR + refunds.
E-COMMERCE SELLER STRATEGY: (1) 194O 0.1% + GST TCS 1% both apply — track separately. (2) PAN mandatory (avoid 5% 194O). (3) GST registration mandatory (no threshold for e-commerce). (4) Presumptive 44AD if turnover < ₹2cr (3cr if digital). (5) Reconcile Form 26AS (income tax) + GSTR-2A (GST). (6) Claim both TDS + TCS credits. (7) Platform commission deductible expense. (8) Multiple platforms: consolidate. (9) Inventory + COGS tracking. (10) ENGAGE e-commerce-specialist CA. Compliance burden significant — both income tax + GST layers.