How to interpret your result
The result is an estimate: 0.1% on your sales after returns and cancellations for that period. Strictly, Section 194O applies to the gross amount of sales (excluding GST where the invoice shows it separately), and marketplaces may treat returns differently — so check your settlement report and Form 26AS for the actual figure.
TDS deducted under Section 194O isn't a final cost — it's an advance credit against your income tax liability, reflected in your Form 26AS and claimable at the time you file your ITR. It has no bearing on your GST liability or the separate 0.5% GST TCS marketplaces also deduct under GST law.
If your Form 26AS doesn't match what you calculate here, check whether the marketplace's reporting period differs from your own — 194O TDS is deducted on a payment basis, so timing mismatches near month-end are common and usually resolve within a quarter.
What is Section 194O TDS?
When you sell on Amazon, Flipkart, Meesho, or any registered e-commerce operator, the platform is required to deduct 0.1% TDS on the gross amount of sales credited to your account (excluding GST shown separately) before releasing payment. This is mandated by Section 194O of the Income Tax Act, introduced in the Union Budget 2020. From 1 April 2026 the same provision sits in Section 393(1) of the Income-tax Act, 2025, with the rate unchanged.
Estimate used by this calculator = Gross sales credited − Returns and cancellations
So if your monthly sales were ₹1,50,000 and returns were ₹10,000, the platform deducts 0.1% TDS on ₹1,40,000 = ₹140.
When does 194O TDS apply?
| Seller type | Threshold | TDS rate |
|---|---|---|
| Individual / HUF | Only if annual sales exceed ₹5 lakh | 0.1% |
| Company / Firm / LLP | No threshold — from first rupee | 0.1% |
| Any seller without PAN | No threshold | 5% |
Once the threshold is crossed in a financial year, TDS applies on all subsequent credits — not just the amount above ₹5 lakh.
How is TDS different from GST TCS?
E-commerce platforms collect two separate deductions that are often confused:
| Section 194O TDS | GST TCS | |
|---|---|---|
| Law | Income Tax Act | GST Act |
| Rate | 0.1% of gross sales | 0.5% of net taxable value |
| Purpose | Advance income tax | GST compliance |
| Claim in | ITR Schedule TDS2 | GST return (GSTR-3B) |
| Appears in | Form 26AS / AIS | GSTR-2A / GSTR-2B |
Both appear as line items in your marketplace seller account.
How to claim 194O TDS credit in your ITR
- Download Form 26AS from the Income Tax portal and verify the TDS entries
- Cross-check with your AIS (Annual Information Statement)
- In your ITR, go to Schedule TDS2 (TDS on other income)
- Enter the TAN of the e-commerce operator and the TDS amount
- The credit reduces your final tax payable — any excess is refunded
Step-by-step guide: How to claim TDS credit in ITR →
Sources and assumptions
- Rate and threshold: 0.1% under Section 194O of the Income-tax Act, 1961 (reduced from 1% with effect from 1 October 2024), carried into Section 393(1) of the Income-tax Act, 2025 from 1 April 2026 at the same rate. The ₹5 lakh threshold applies only to individuals and HUFs who have furnished PAN or Aadhaar; the 5% rate applies when neither is furnished. Check the current provisions on the Income Tax Department portal.
- Base: gross sales credited to you minus returns and cancellations, excluding GST shown separately on the invoice. Platforms may compute the base per payment cycle, so monthly figures in your Form 26AS can differ slightly from this estimate.
- Not included: the separate 0.5% GST TCS under Section 52 of the CGST Act — see the Amazon or Flipkart GST calculators.