TDS on e-commerce payments

E-commerce operators (Amazon, Flipkart, Zomato, etc.) deduct TDS at 0.1% on the gross amount of sales/services facilitated through their platform — reduced from 1% with effect from 1 October 2024.

Key points

• An e-commerce operator that facilitates the sale of goods or provision of services of an e-commerce participant through its digital platform must deduct TDS at 0.1% on the GROSS amount of such sales / service value at the time of credit OR payment, whichever is earlier.
• The rate was 1% from inception in October 2020, reduced to 0.1% by Finance Act 2024 with effect from 1 October 2024.
• The threshold is gross sales > ₹5 lakh in an FY for an INDIVIDUAL/HUF e-commerce participant;
• no threshold for other participants (firms, companies, etc.).
• PAN must be furnished — otherwise 5% under §206AA.
• The participant gets credit for the TDS in their own ITR.

Reference: §194-O, ITA 1961 — under ITA 2025 (FY 26-27 onwards), this is §393(1) Sl.8(v)