According to Sec. 194-O of income tax act ,any payment by e-commerce operator is required to deduct tds @at the rate of 1%. on gross amount.
1. What is section 194-O of income tax act?
If sale of goods or services of an e-commerce participants is facilitated by an e-commerce operator through its digital or electronic facility or platform. Further ,such e-commerce operator is required to deduct tax at source under section 194-O.
Further, according to 194-O any payment by e-commerce operator is required to deduct tds @at the rate of 1%. on gross amount .
2. Who are e-commerce operator and participants?
e-commerce operator : e-commerce operator means a person a person who owns , operates or manages digital or electronic facility or platform for electronic commerce.
e-commerce participants: e-commerce participants means a person resident in India selling goods or services through digital or electronic facility or platform for electronic commerce.
Further, services for this purpose include fees for technical services or professional services.
3. Who is responsible for deduction of TDS u/s 194-O?
According to section 194-O e-commerce operator are responsible for deducting TDS before making payment to the participants.
4. When is TDS to be deducted u/s 194-O?
Tax is deductible by e-commerce operator at the time of credit of amount of sale of goods or services to the account of an e-commerce participants. Or at the time of payment thereof to such e-commerce participants by any mode, whichever is earlier.
5. What is the rate of TDS u/s 194-O?
The tax is deductible at the rate of 1% of the gross amount of such sale or goods or services.
Further, if recipient does not have PAN, tax is deductible at the rate of 5%.
6. When the tax u/s 194-O is not deductible?
Tax is not deductible u/s 194-O if following conditions are satisfied:
- E-commerce participants is an individual or HUF.
- gross amount of such sale of goods or services through e-commerce operator during the previous year does not exceeds ₹5,00,000.
- And, such e-commerce participant has furnished his PAN or Aadhaar number to the e-commerce operator.
Refer: https://taxandfinanceguide.com/tds-on-cash-withdrawal-u-s-194n/
