Income-tax Act, 1961Section 194O
- 0.1% on gross sales facilitated by the e-commerce operator (from 1 Oct 2024)
- Exemption for small individual/HUF sellers up to ₹5 lakh with PAN
Applies to FY 2025-26 (AY 2026-27) and earlier years.
IT Act 1961 → 2025 / Section 194O
TDSSection 194O → Section 393
TDS by e-commerce operators on sales by sellers
Section 194O of the old Income-tax Act, 1961 · new section 393 under the Income-tax Act, 2025
New reference Section 393(1), Table Sl. No. 8(v); exclusions 393(4), Sl. No. 11
Income-tax Act, 2025Section 393(1), Table Sl. No. 8(v); exclusions 393(4), Sl. No. 11
- Section 393(1), Table Sl. No. 8(v): 0.1% of gross amount
- Small-seller exclusion in 393(4), Sl. No. 11
- Higher 5% rate if no PAN (section 397(2))
Applies from tax year 2026-27 (from 1 April 2026).
What changed
Consolidated into section 393; rate unchanged.
Practice notes
- Buyer-side TDS (old 194Q) does not apply where this TDS applies.
Frequently asked
What is TDS on e-commerce sellers under the new Income Tax Act 2025?
0.1% of the gross sale amount, deducted by the e-commerce operator under section 393(1), Table Sl. No. 8(v).
What is section 194O called in the new Income-tax Act, 2025?
Section 194O of the Income-tax Act, 1961 corresponds to Section 393(1), Table Sl. No. 8(v); exclusions 393(4), Sl. No. 11 of the Income-tax Act, 2025, which applies from 1 April 2026 (tax year 2026-27).
What changed in section 194O under the new Income Tax Act?
Consolidated into section 393; rate unchanged.
Is section 194O still applicable for FY 2025-26?
Yes. Income of FY 2025-26 (AY 2026-27) and earlier years is governed by section 194O of the 1961 Act. Section 393(1), Table Sl. No. 8(v); exclusions 393(4), Sl. No. 11 of the 2025 Act applies from tax year 2026-27.