E-comm platforms must deduct tax at source

To increase the revenue from businesses that operate on e-commerce platforms, the Centre has proposed to enact a new section — 194-O — in the Income Tax Act, 1961. When this amendment is passed, sellers of goods and services on e-commerce platforms will be impacted.

Who all are included?

This amendment does not impact our online purchases. The deduction of tax at source will come into play when a service provider or a seller gets payment from the e-commerce platform. The new amendment could include almost all e-commerce transactions that most of us undertake.

The person who owns and runs an e-commerce platform and is responsible to make payments to sellers or service providers on the platform is liable to deduct tax at source.