Publication - YourStory
Edition - Online
Finance Minister Nirmala Sitharaman, in a huge push for digital marketplaces, reduced the tax deducted at source (TDS) for ecommerce operators from 1% to 0.1% in the Union Budget 2024-2025.
According to Section 194-O of the Income Tax Act, 1961, an ecommerce operator is required to deduct TDS for facilitating any sale of goods or providing services through an ecommerce participant. This means if a buyer purchases from a brand on an ecommerce platform, such as Amazon, then Amazon has to deduct 1% TDS before transferring any payment to the brand. This has been reduced to 0.1% effective October 10, 2024.
"Reducing TDS on ecommerce entities is poised to improve cash flow for small businesses, incentivising their digital transformation,” siad Open Network for Digital Commerce (ONDC) in a official statement.
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