New TCS, TDS system effective from today

BENGALURU: The Income Tax department has notified guidelines on a 1 per cent Tax Deducted at the Source (TDS) for e-commerce companies and 0.1 per cent Tax Collected at the Source (TCS) for sellers to be implemented from October 1 onwards. However, this has raised concerns among industry stakeholders.

Experts say that the government should consider releasing a fresh draft specifying the nature of service providers, e-commerce operator, service recipient and applicability to foreign firms. They also say that the move may impact the cash flows of the e-commerce companies and discourage sellers.