Tax Deducted at Source FAQs

Frequently Asked Questions (“FAQs”) on Tax Deducted at Source (“TDS”) under section 194-O of the Income Tax Act, 1961

  1. What is the change?

    2. The Finance Act, 2020 inserted a new section 194-O which provides that e-commerce companies facilitating sale of goods or supply of services by resident e-commerce sellers must deduct TDS on the gross amount of sales or service paid or credit to e-commerce sellers after October 1, 2020.

    E-commerce companies which facilitate sale of goods through their electronic platform are required to deduct TDS from their sellers.

    When the gross sales of resident sellers on the electronic platform exceeds INR 500,000 during the financial year, the e-commerce company must deduct TDS from such sellers.

  1. How much TDS will be charged?

    2. Sellers

    TDS %

    Sellers who have submitted their Permanent Account Number (“PAN”) or Aadhaar

    0.75% for the financial year 2020-2021 applicable till March 31, 2021

    1% to continue from April 1, 2021

    Sellers who have not submitted their PAN or Aadhaar or where Sellers’ PAN is not available/invalid

    5%
  1. Is the TDS applicable to all e-commerce sellers?

    2. TDS is applicable to all resident sellers whose gross sales of goods or services exceeds INR 500,000 during the financial year. However, individual and Hindu Undivided Family (“HUF”) sellers whose gross sales during the financial year is less than INR 500,000 and such persons have provided PAN, are excluded from TDS.

  1. How has eBay deducted TDS from eBay sellers till May 1, 2022?

    2. Prior to May 1, 2022, eBay debited the monthly TDS from eBay seller’s account before the 10th of each month for the previous month’s gross sales.

  1. What changes is eBay making in TDS deduction effective May 1, 2022

    2. eBay will deduct TDS on each transaction instead of in a monthly manner on the previous month’s gross sales.

    Illustration: If the buyer pays for eBay seller’s transaction on 1 May and subsequently eBay receives confirmation of successful payment, eBay will deduct 1% TDS. This deduction will reflect in eBay seller’s Seller Hub along with other fees.

    Transaction Listing price of product : USD 1,000

    Shipping/tax (if applicable) : USD 20

    Total cost visible to buyer : USD 1,020

    Buyer pays to eBay : USD 1,020.00

    Less :

    Applicable eBay fees : USD 100.00

    Net sale proceeds available to eBay seller : USD 920.00

    Less : TDS @1% (on the total cost paid by buyer) : USD 10.20

    Net amount sent to Payoneer account : USD 909.80

    (all amounts are for understanding purpose)

    The net sale proceeds are available for transfer to eBay seller’s Payoneer account and, from there, to eBay seller’s bank account.

  1. How would eBay determine if an eBay seller gross sales exceeded INR 500,000 in a financial year?

    2. An eBay seller exceeding INR 500,000 in gross sales in a financial year (April 1 of one calendar year – March 31 of the next calendar year) will be subject to TDS.

    Illustration 1

    • If an eBay Seller’s gross sales exceeds INR 500,000 on September 15, 2022 then from September 15, eBay will deduct 1% TDS on every transaction;
    • If eBay seller’s PAN is not available/valid, eBay will deduct 5% TDS from each transaction.

    Illustration 2

    • If an eBay seller’s gross sales exceed INR 500,000 on November 30, then from November 30, eBay will deduct 1% TDS on every transaction; Additionally, eBay will also deduct 1% on the sales amount from 1 April till 30 November . This as per rule of Income Tax act.
    • If eBay seller’s PAN is not correct/valid, eBay will deduct 5% TDS from each transaction.
  1. What will be the method of deduction?

    2. eBay will deduct the TDS from the eBay seller’s sale proceeds on each transaction.

  1. How will the eBay seller be able to check if TDS has been paid to the Government?

    2. eBay sellers can visit https://incometaxindiaefiling.gov.in and check their TDS in their Form 26AS. TDS will be deducted by “eBay Singapore Services Pte Ltd” with a TAN number of “MUME13872F”. 

  1. How can an eBay seller claim credit or refund of the TDS?

    2. eBay sellers can claim refund or credit of TDS while filing their income tax returns.

  1. Who should eBay sellers contact if they have questions related to TDS?

    2. eBay sellers can send their queries to tds-support@ebay.com.

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