E-commerce cos to collect 1% TDS from sellers under new levy

The government on Saturday proposed a new levy of one per cent TDS (tax deducted at source) on e-commerce transactions, a move that could increase the burden on sellers on such platforms.

“In order to widen and deepen the tax net by bringing participants of e-commerce (sellers) within the tax net, it is proposed to insert a new section 194-O in the Act to provide for a new levy of TDS at the rate of one per cent,” as per 2020-21 Budget documents.

Also, consequential amendments are being proposed in section 197 (for lower TDS), in section 204 (to define person responsible for paying any sum) and in section 206AA (to provide for tax deduction at 5 per cent in non-PAN/Aadhaar cases).