Budget 2020: E-commerce companies to collect 1 per cent TDS from sellers under new levy

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New Delhi | February 1, 2020 5:11 PM

Budget 2020 India: 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).

budget 2020, budget 2020 date, budget 2020 date india, budget 2020 expectations, budget 2020 highlights, budget 2020 income tax, budget 2020 live, union budget 2020, union budget, union budget 2020 date, union budget india, union budget 2020-21, income tax, TDS, tax deductionBudget 2020-21: E-commerce companies were yet to respond on queries seeking inputs on the levy.

Union Budget 2020 India: 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 burden on sellers on such platforms. “In order to widen and deepen the tax net by bringing participants of e-commerce (sellers) within tax net, it is proposed to insert a new section 194-O in the Act so as 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).

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The amendment will take effect from April 1, 2020. The document explained that e-commerce operator — an entity owning, operating or managing the digital platform — will have to deduct one per cent TDS on the gross amount of sales or service or both.

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E-commerce companies were yet to respond on queries seeking inputs on the levy. This provision will not apply in cases where the seller’s gross amount of sales during the previous year through the e-commerce operator is less than Rs 5 lakh and has furnished his PAN or Aadhaar number.

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