ITR Filing for E-commerce Sellers: Complete Guide for FY 2025-26

Your ITR-3 deadline this year is August 31, 2026. Not July 31.

That's the first thing most marketplace sellers get wrong — they see the July 31 deadline everywhere and assume it applies to them. It doesn't. ITR-3 and ITR-4 (non-audit cases) deadlines were revised to August 31 for FY 2025-26. If you're filing a business income return — which every Amazon, Flipkart, or Meesho seller is — mark August 31 in your calendar today.

The more expensive mistake isn't missing the date. It's filing the wrong form and leaving ₹40,000–₹80,000 in unclaimed TDS and business expense deductions on the table.

The Deadlines — All of Them, by Taxpayer Type

ITR Form	Who Uses It	FY 2025-26 Deadline
ITR-1 (Sahaj)	Salaried, one house property, interest income only	July 31, 2026
ITR-2	Capital gains, foreign income, multiple properties	July 31, 2026
ITR-3	Business income, full books of accounts	August 31, 2026
ITR-4 (Sugam)	Presumptive business income under 44AD	August 31, 2026
ITR-3 / ITR-4 (audit cases)	Turnover above ₹1 crore (₹10 crore for digital)	October 31, 2026
ITR-5	Partnership firms	October 31, 2026
ITR-6	Companies	October 31, 2026
Revised return	Any form	March 31, 2027
Belated return	Any form	December 31, 2026

Most individual marketplace sellers file ITR-3 or ITR-4. The August 31 deadline is yours.

ITR-3 vs ITR-4 — The Decision That Changes Everything

This is not an administrative choice. It determines how much tax you pay, how you handle expenses, and whether you need a CA audit.

ITR-4 — Presumptive Taxation under Section 44AD: You declare 6% of gross digital receipts as net business income (8% for cash receipts). No books of accounts required. No individual expense deductions allowed. Simple, fast, CA-optional.

Works perfectly if: your actual profit margin is below 6% of turnover (you'll pay less tax declaring 6% than your real margin), or your turnover is low enough that the simplicity is worth more than the precise deductions.

The ceiling: Section 44AD is only available if your turnover is below ₹2 crore. Cross that and you shift to ITR-3 — with full books, a potential tax audit, and all the individual deductions that come with it.

ITR-3 — Regular Business Income: You declare actual revenue minus actual allowable expenses. More paperwork, but every legitimate business cost reduces your taxable income.

Kavya runs a skincare brand doing ₹80L/year on Amazon and her own D2C website. Her actual costs — inventory, packaging, shipping, ads, CA fees — total ₹58L, giving her a real margin of 27.5%. Under Section 44AD, she'd declare 6% of ₹80L = ₹4.8L as income. Under ITR-3 with actual books, she declares ₹22L. The presumptive route actually saves her tax in this case — but only because her real margin is above 6%. For sellers with razor-thin margins, ITR-3 with full deductions wins.

Run both calculations before choosing. The 6% presumptive option is only obviously right when your real profit is at or above 6% of GMV.

What Income to Declare — and What Most Sellers Miss

Declare as business income:

• Gross marketplace payouts from Amazon, Flipkart, Meesho (before TDS deduction — not net payout)
• Direct website / D2C store sales
• Any consulting or training income from your category expertise
• Referral income from affiliate links (yes, including Dhanaay-style affiliate commissions)

The common miss: Declaring net settlement amounts instead of gross receipts. Your Amazon settlement is after TDS (0.1%), platform fees, and other deductions. Your gross receipts — the total sales value before any deductions — is what goes in the ITR as turnover. TDS is then separately claimed as a credit. Declaring net instead of gross understates turnover and mismatches with your AIS.

Also declare:

• FD interest (taxable as "Income from Other Sources")
• Savings account interest above ₹10,000/year
• Any capital gains from shares or mutual fund redemptions (these go in Schedule CG, not with business income)

Expenses You Can Deduct Under ITR-3

Under regular books (ITR-3), every genuine, documented business expense reduces your taxable income at your full slab rate.

Directly deductible:

• Marketplace platform fees and commissions (Amazon referral fees, Flipkart closing fees — these are shown in your settlement reports)
• Shipping and logistics costs
• Packaging materials
• Advertising and sponsored listing spend (Amazon Ads, Meta Ads, Google Ads)
• Warehouse rent (if you store inventory outside home)
• Staff salaries and contractor payments (with TDS paid if applicable)
• CA and accounting fees (including what you pay Dhanaay)
• Mobile, internet, and software subscriptions used for business
• Returns and refunds processed (net sales = gross sales minus returns)

Home office deduction (proportionate): If you run your business from home, a proportionate share of rent, electricity, and internet is deductible. Calculate by area used for business ÷ total home area. Keep the rent agreement and utility bills.

Depreciation on assets: Laptop, camera, photography equipment, packaging machinery — all eligible for depreciation as a business asset. Claim at the rates prescribed under the Income Tax Act for each asset class.

What you cannot deduct:

• Personal expenses mixed with business (always keep separate accounts)
• Cash payments above ₹10,000 to a single vendor in a day (Section 40A(3))
• Payments to related parties at above-market rates

How to Claim Your TDS and TCS Credits

This step recovers the most money for most sellers, and it's where returns most commonly go wrong. There are two separate credits to claim:

1. Income Tax TDS — Section 194O (in your ITR):

• Amazon, Flipkart, Meesho deduct 0.1% of gross sales as TDS
• This appears in Form 26AS (Part A) and your AIS
• Claim in Schedule TDS2: enter each platform's TAN, gross amount, TDS deducted
• TANs: Amazon — BLRA08899F | Flipkart — BNAF00598F | Meesho — BLRF04579F
• Wait until mid-June to file — Q4 (Jan–Mar) TDS typically reflects in Form 26AS by then

2. GST TCS — Section 52 CGST Act (in your GSTR-3B, not your ITR):

• Separate 1% deduction on net taxable value — claimed in GSTR-3B Table 8
• Not claimed in ITR — this is GST law, not income tax
• Mixing these two up is the single most common seller error in compliance

Verify Form 26AS matches your TDS certificates before filing. A mismatch means the platform hasn't correctly filed their TDS return against your PAN — raise a correction before filing, not after. How to claim TDS credit step-by-step →

The New Tax Regime Question — Decide Before You File

From FY 2023-24, the new tax regime is the default. If you don't actively opt for the old regime in your ITR, you're on the new regime.

For business owners, there's a critical nuance: if you file under the new regime in one year, you can switch back to the old regime only once in your lifetime. Choose carefully.

Quick framework for marketplace sellers:

• ₹12L or below in net business income — New regime, zero tax under the full rebate announced in Budget 2025 (for individuals)
• ₹12L–₹50L, minimal investments — New regime almost always better; lower slab rates without the complexity
• ₹12L–₹50L, heavy ELSS / home loan / HRA — Old regime may win; run the comparison with your CA before filing
• Above ₹50L — New regime typically better; marginal slab savings from deductions rarely exceed the lower rate advantage

Use the Tax Regime Calculator before filing →

The Step-by-Step Filing Process for Sellers

Step 1 — Collect your documents (do this in April–May):

• All marketplace settlement summaries for April 2025 – March 2026
• Form 26AS from income tax portal (download after April 15)
• AIS (Annual Information Statement) — verify all income entries match
• TDS certificates from each marketplace
• Bank statements for business account (12 months)
• Purchase invoices for all deductible expenses
• Last year's ITR and computation sheet

Step 2 — Wait for Form 26AS to stabilise (mid-June): Q4 TDS from marketplaces reflects in 26AS approximately May–June. File after mid-June, not on April 1 when the portal opens — early filers routinely miss Q4 TDS credits and have to file revised returns.

Step 3 — Compute your income and tax: Gross receipts → less returns → net sales → less allowable expenses → net profit → less deductions (old regime only) → taxable income → tax at slab → less TDS credit → net payable or refundable.

Step 4 — File online: Income tax portal → e-File → File ITR → AY 2026-27 → select ITR-3 or ITR-4 → Online mode. Pre-filled AIS data populates most fields — verify every line before accepting. File Schedule TDS2 carefully.

Step 5 — E-verify immediately: Aadhaar OTP is the fastest method (instant). An unverified ITR is not a filed ITR — refunds and processing don't begin until verification is complete.

If You're Behind on Previous Years

FY 2025-26 ITR (AY 2026-27) is filed from April 2026. But many sellers also have unfiled or incorrectly filed returns from FY 2023-24 or FY 2024-25.

• Revised return for errors in a filed return: until March 31 of the following year (last date for AY 2025-26 revisions: March 31, 2026 — passed)
• Updated return under Section 139(8A): available up to 2 years from the end of the assessment year, with an additional tax of 25–50% on the outstanding liability. Worthwhile if the undeclared income is significant — voluntary disclosure before a notice is always better than responding to one.

Our CA team handles multi-year ITR filing and notice responses → Section 194O: understand exactly what TDS was deducted from your payouts → New vs old tax regime — which one saves your business more →

August 31 is 5 months away. The sellers who file clean returns by then will have their refunds in September and move on. Those who rush in late August without reconciling Form 26AS will spend October dealing with mismatch notices — for a problem that was always a June task.