TDS Applicability and Rates explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
This guide explains TDS for E-Commerce Sellers in India — the TDS you must deduct on payments, the TDS deducted on your own income, rates and returns.
TDS E-Commerce Sellers must deduct
Like any business, E-Commerce Sellers must deduct TDS on specified payments and deposit it with the government:
| Section | Nature of payment | Typical rate |
|---|---|---|
| 192 | Salary paid to employees | Slab rates |
| 194C | Payments to contractors | 1% (individual/HUF) / 2% (others) |
| 194J | Professional or technical fees | 10% |
| 194I | Rent of land/building (plant & machinery) | 10% (2%) |
| 194H | Commission or brokerage | 2% |
| 194Q | Purchase of goods over ₹50 lakh | 0.1% |
TDS on the income of E-Commerce Sellers
- Operators deduct 0.1% TDS under Section 194O on your gross sales
- GST TCS (0.5%) is collected by the marketplace
TDS compliance
- Obtain a TAN before deducting TDS
- Deposit TDS by the 7th of the following month
- File quarterly TDS returns (24Q for salary, 26Q for non-salary) and issue Form 16/16A
- Late deduction/deposit attracts interest and fees under Sections 201/234E
Key due dates & penalties to remember
Missing deadlines is the most common — and most avoidable — compliance failure for E-Commerce Sellers. Keep these in view:
- GST returns: GSTR-1 and GSTR-3B by their monthly/quarterly due dates; late filing attracts fees and interest
- TDS: deposit by the 7th of the next month and file returns quarterly; delays attract interest under Section 201
- Income tax: pay advance tax in four instalments and file the ITR by the due date to avoid 234A/234B/234C interest
- ROC (companies/LLPs): file annual returns and financials on time to avoid heavy per-day penalties
More guides for E-Commerce Sellers
- Complete Compliance Checklist for E-Commerce Sellers
- GST Applicability & Compliance for E-Commerce Sellers
- Income Tax & Accounting Guide for E-Commerce Sellers
- Accounting & Bookkeeping Guide for E-Commerce Sellers
Compliance for E-Commerce Sellers, handled end-to-end
TaxClue's CA/CS team manages registrations, GST, income tax, TDS and bookkeeping for e-commerce sellers — fully online, transparent pricing.
Talk to an expert →