The 60-second version
Section 194U requires ecommerce operators to deduct 1% TDS on payments to participants — returning NRIs selling online must reconcile 26AS and claim credit in ITR.
194U is participant-side — separate from 194O operator TDS lane
Section 194U applies when ecommerce operator pays resident participant — 1% TDS on gross amount credited.
Returning NRIs selling on Amazon India, Flipkart, or Meesho see 194U entries in Form 26AS — reconcile before ITR.
Operator lane: Section 194O guide if you run the marketplace.
Ecommerce TDS matrix
| Section | Who deducts | Rate | On whom |
|---|---|---|---|
| 194U | Operator | 1% | Participant seller |
| 194O | Operator | 1% | Operator gross |
| 194Q | Buyer | 0.1% | Goods purchase |
| 194H | Payer | 5% | Commission agent |
194U reconciliation
Download 26AS
Check 194U entries.
Match payouts
Operator statements.
GST align
GSTR-1 vs TDS.
ITR credit
Schedule TDS.
Refund
If excess deducted.
Flow
194U kit
- PAN operative.
- 26AS.
- Operator TDS cert.
- Payout stmt.
- GST returns.
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PAN inoperative
Operator may deduct 20% under 206AA if PAN inoperative — fix PAN first.
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194U vs 194O?
194U is TDS on participant payments; 194O is TDS on ecommerce operator gross transactions.
Threshold?
194U applies once operator pays participant — verify current FY threshold in IT Act.
Foreign platform?
India-source sales through Indian operator attract 194U; pure foreign platform may differ.
RNOR?
TDS still deducted — claim credit in ITR based on actual tax liability.
Refund?
Excess TDS refunded via ITR if total tax lower than deducted.
206AB?
Non-filer higher TDS may apply to operator side — check 26AS rate.
Your tax year is already running.
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