Tds on commission and other Expenses

After the introduction of Section 194O in the Income-tax Act, 1961, the seller is not required to deduct TDS on payments made to e-commerce operators like Amazon or Flipkart for: 1. Commission invoices 2. Advertising invoices Section 194O states that the e-commerce operator is required to deduct TDS at 1% on the gross amount of sales or services provided through their platform. This TDS deduction is applicable if the sales or services provided exceed ₹5 lakhs in a financial year. However, if the seller is paying Amazon or Flipkart for advertising services directly, TDS deduction may still be applicable under Section 194C (TDS on payments to contractors and subcontractors) or Section 194J (TDS on professional fees). To summarize: - No TDS deduction by the seller on commission payments to e-commerce operators like Amazon or Flipkart. - TDS deduction may still apply on direct advertising payments to these platforms, depending on the circumstances. Please consult a tax professional or chartered accountant for specific guidance on your situation.

Section 194H (TDS on commission and brokerage at 5%) applies when a payment is clearly for agency, referral, or distribution commission. Section 194J (10%) applies to professional or technical services fees. The key difference is the nature of the work: pure intermediary or referral activity attracts 194H, while expert advice or skilled technical work attracts 194J. If a single invoice combines both, you should apply TDS under the section that matches the dominant nature. Our [TDS and TCS section changes guide for April 2026](https://taxgarden.in/blog/tds-tcs-section-changes-april-2026-mapping-guide) has a payment-type reference table covering the updated sections after the FY 2026-27 budget changes.