Revision of TDS Rates on e-commerce sellers under Section 194O of Income Tax Act

Dear Seller,                                                          

Please refer to our AB Post dated 19^th April 2022 which stated that e-commerce entities facilitating sale of goods of e-commerce sellers must deduct tax at source (“TDS”) on the gross amount of their sales paid or credit to such e-commerce sellers. TDS is deducted for all Indian resident sellers where the gross sales of the goods or services during the financial year is more than INR 500,000.

Effective 1 April 2021, the TDS rate was 1% on the gross sales of goods or services. Where the e-commerce seller had not provided a permanent account number (“PAN”) or where the PAN was not operational or valid, the TDS rate was 20%.

Please note, effective 2 February 2023, the TDS rate has been decreased from 20% to 5% where the e-commerce seller has not provided a PAN or where the PAN is not operational or valid or wrongly updated.

Regards

Team eBay