Section 194-O has inserted that normally explains the applying 1% tax deducted at source (TDS) on the amounts made to E-commerce Members, which shall be suitable for the transactions from 1st October 2020 onward.
The residents and non-residents e-commerce operators will be applicable to make the payment under section 194-O in context to the sale of goods, such as digital products, podcasting, blogs videos etc. through the digital and electronic facility.
Latest Update
- Budget 2024: The TDS rate under section 194-O is reduced from 1% to 0.1% for e-commerce operators to e-commerce participants, effective from October 1, 2024.
- Recently the government has been putting forth idea to offer some relaxation in the gross sales tax i.e. of 1 % to the MSMEs (micro, small and medium enterprises) The e-Commerce platforms will be the better option for all the MSME to avail this offer. However, the government will be taking some time to finalize this discount. Also, there will be multiple discounts offers on the list and they will be soon communicated once ready. The limit of the tax exemption could be raised from the existing INR 5 lakh for small businesses.
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An E-Commerce executive is an individual who controls, functions, or runs a digital/electronic facility for the sale of goods and services. On the sale, the person has the responsibility for doing the payments to e-commerce. Under section 194-O the e-commerce operator must eliminate TDS at a 1% rate on the total amount of items through e-commerce executives via a digital and electronic system.
