TDS · Section 194O · FY 2026–27
Section 194O: TDS by E-Commerce Operators
Section 194O (TDS by E-Commerce Operators): the TDS rate is 0.1%. Threshold: Rs. 5,00,000 per financial year per deductee (individual/HUF only; no threshold for other entities). From 1 April 2026 the Income-tax Act, 2025 moves it to Section 393(1) Sl. 8(v), with the same rate and threshold.
Section 194O requires e-commerce operators to deduct TDS at 0.1% on payments made to sellers/service providers using their platforms. The rate was cut from 1% to 0.1% by the Finance (No. 2) Act 2024 with effect from 1 October 2024 — payouts before that date carry the old 1%. Without a valid PAN linked to Aadhaar the proviso to Section 206AA raises it to 5%. This binds operators located OUTSIDE India too: Upwork states it is "required to withhold this tax" and deducts 0.1% or 5%, and Fiverr lists Section 194-O at "0.1 to 5% of the total transaction price". TDS is computed on the gross amount you invoice the client, BEFORE the platform takes its service fee. Indian operators (Urban Company, Zomato for delivery partners) deduct under the same section.
Rate source: Income Tax Department TDS rate chart
0.1%
0.1%
Threshold
₹5L a year (individuals)
Who deducts
E-commerce operators, including those based outside India (Upwork, Fiverr) as well as Indian ones.
No PAN
5%
Shows up in
Form 26AS & AIS, quarterly
What it looks like on a real payment
Worked exampleSec 194O
Amount payable to you₹1,00,000
TDS @ 0.1%− ₹100
You receive₹99,900
The ₹100 is not lost — it is pre-paid tax, credited in your 26AS and adjusted at filing.
Without a PAN (or with an inoperative one), 194-O is deducted at 5% — the proviso to Section 206AA, s.397(2) from 1 April 2026 — instead of the 20% most other sections fall back to. Still far above 0.1%, so link your PAN and Aadhaar.
Run your own numbersFree 194O calculator — invoice amount in, deduction and take-home out. No signup.What this means for you
From 1 April 2026, the Income-tax Act 2025 renumbers this as Section 393(1) Sl. 8(v). The rate and threshold are unchanged — only the citation moves.
When your client must deposit it — and report it
The client must deposit TDS by the 7th of the month after deduction (30 April for March). It reaches your 26AS only after they file the quarterly TDS statement (Form 26Q), due on these dates — which is why a deduction in March can be invisible until 31 May:
Form 26Q · quarterlyFY 2026–27
Q1 — Apr to Jun31 July
Q2 — Jul to Sep31 October
Q3 — Oct to Dec31 January
Q4 — Jan to Mar31 May
FAQ
What is the TDS rate under Section 194O?
Who deducts TDS under Section 194O?
What is the threshold for Section 194O TDS?
Is TDS under Section 194O deducted on the GST-inclusive amount?
How do I claim TDS deducted under Section 194O in my ITR?
Paid through Upwork or Fiverr? Read how to report platform income in India — what the platform withholds, and how it reaches your 26AS.
For the CA reading this
The deadline sheet you already send, with your name on it
Every statutory date for the month — GST returns, advance tax, and the dates your client's own customers owe them: when the TDS they withheld must reach the department, and when the certificate is due. Add your firm's name and forward it as it stands. No signup, no email, nothing to accept.
The image is the one that travels on WhatsApp. Dates are statutory, not advice — the sheet says which rows bind whom.
Sources
Rates as notified for FY 2026–27 and can change. General information, not tax advice. Verify with your CA before you file.
Related sections
Every deduction, tracked to the rupee
Your TDS credits, never lost.
HourSlip logs the expected deduction on every invoice and reconciles it against 26AS — so filing season has no surprises.
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