The 60-second version
Section 194O requires e-commerce operator to deduct 1% TDS on gross amount of sales to resident seller — operator deposits TDS, seller claims credit in ITR.
Marketplace deducts 194O — you reconcile in ITR
Section 194O applies when e-commerce operator facilitates sale of goods or services — operator deducts 1% TDS on gross sales credited to resident seller.
PAN mandatory — without PAN operator deducts 5% per Section 206AA.
Buyer-side lane: Section 194Q guide if you purchase goods > ₹50L.
Marketplace tax stack
| Layer | Rate | Who deducts |
|---|---|---|
| 194O | 1% | Amazon/Flipkart on gross |
| GST | 18% etc. | Collected on supply |
| TCS 206C(1H) | 0.1% | Buyer on goods > ₹50L |
| 194Q | 0.1% | Buyer if turnover > ₹10Cr |
Seller reconciliation
PAN on portal
Update seller account.
Download TDS
Operator statement monthly.
Match 26AS
194O entries each quarter.
ITR Schedule
Claim TDS credit.
GST reconcile
GSTR-1 vs marketplace report.
Flow
194O seller kit
- Seller PAN.
- Operator TDS stmt.
- 26AS.
- GSTR-1.
- ITR ACK.
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Multiple marketplaces
Each operator deducts separately — aggregate TDS in one ITR.
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Turn this guide into a decision file
0 of 4 checked
Own website sales?
No 194O — operator must facilitate sale.
No PAN?
5% TDS until PAN updated.
Loss year?
TDS still deducted — claim refund in ITR.
NRI seller?
Section 195 may apply — operator rules differ.
Services on platform?
194O covers services too via operator.
vs 194Q?
194O is operator on seller; 194Q is buyer on purchase.
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