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Central Board of Direct Taxes1 month ago39 sec readHigh impact

TDS Rate on Payments to E-commerce Operators Revised

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Section 194-O TDS rate reduced from 1% to 0.1% for payments to e-commerce participants, aligning with government's ease-of-doing-business push.

Key points

  • TDS rate cut from 1% to 0.1%
  • Threshold unchanged at ₹5 lakh per participant
  • New Form 26Q schedule effective FY 2026-27

Impact analysis

  • Materially eases working-capital pressure on small e-commerce sellers who previously faced 1% TDS on gross sales.

Who should care

E-commerce ops · Sellers · Tax teams

Affected industries

E-commerce · D2C · Payments

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