Section 194O: TDS on e-commerce transactions
Section 194O of the Income-tax Act, 1961 covers TDS on e-commerce transactions. From 1 April 2026 the same deduction sits in Section 393(1), Table Sl. No. 8(v), Income-tax Act, 2025. The rate, threshold and conditions below were read from incometaxindia.gov.in on 13 October 2026.
Section 194O at a glance
| Nature of payment | Sale of goods or provision of services by an e-commerce participant facilitated by an e-commerce operator through its digital/electronic platform |
|---|---|
| Who deducts | E-commerce operator |
| Threshold | Nil in Table 393(1); but no deduction (s.393(4) Sl. 11) for individual/HUF participant whose gross sales/services in the tax year do not exceed Rs 5,00,000 and who has furnished PAN/Aadhaar |
| Income-tax Act, 2025 | Section 393(1), Table Sl. No. 8(v), Income-tax Act, 2025 |
| Payee without PAN | Highest of the rate below, the rates in force, or 5% |
TDS rate
| Payee | Rate |
|---|---|
| Resident e-commerce participant | 0.1% of gross amount of sales/services |
Rates exclude surcharge and health and education cess.
Conditions and exceptions
- Direct payments by buyers to participants are deemed credited by the operator (Note 3(b)).
- Where Sl. 8(vi) (VDA) also applies, deduct only under 8(vi) (Note 4).
Which Act applies to your payment
The 1961 Act governs a payment if it was credited or paid on or before 31 March 2026, whichever happened first. If both happen on or after 1 April 2026, the 2025 Act applies.
Source and verification
Income Tax Department: Section 393(1), Table Sl. No. 8(v), Income-tax Act, 2025 →
Last verified on 13 October 2026. Finance Acts change TDS rates and thresholds; check the source before you deduct. This is general information, not advice for your situation.
Related
Frequently asked questions
What is the TDS rate under section 194O?
0.1% of gross amount of sales/services for resident e-commerce participant. Rates exclude surcharge and cess.
What is the threshold for TDS under section 194O?
Nil in Table 393(1); but no deduction (s.393(4) Sl. 11) for individual/HUF participant whose gross sales/services in the tax year do not exceed Rs 5,00,000 and who has furnished PAN/Aadhaar. Below this, no tax is deducted.
What is section 194O called under the new Income-tax Act?
From 1 April 2026 it is Section 393(1), Table Sl. No. 8(v), Income-tax Act, 2025. The e-filing portal's TDS FAQ says the rates and thresholds were carried over; the section number is what changed.
What if the payee has no PAN?
Section 397 of the 2025 Act requires deduction at the highest of the rate above, the rates in force, or 5%.
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