Marketplace Sales in the Tax Statement vs ITR Turnover

In short

• Every marketplace deducts income-tax TDS on your sales and reports the gross amount against your PAN. That amount, together with the GST turnover from your GST returns, appears in your annual tax statement. The name of that statement changes with the tax year; see the box below.
• The Income Tax Department compares those figures with the turnover in your income-tax return. A gap can lead to an online query, an "e-campaign" message, a processing adjustment or, in larger cases, a reassessment notice.
• The gap is usually explainable. The common causes are:
  • returns and cancellations;
  • GST included in one figure and not the other;
  • timing at year end;
  • sales under another GSTIN of the same PAN.
• The answer is a reconciliation, not a revised figure.

Where the figures come from

Marketplace TDS. This was section 194-O of the Income-tax Act, 1961, up to tax year 2025-26. From tax year 2026-27 it is the matching entry in section 393 of the Income-tax Act, 2025. The marketplace (e-commerce operator) deducts TDS on the gross amount of sales made through it. The rate, the base (with or without GST) and the small-seller exemption this site uses are in the box below. Each marketplace reports the amount and the TDS in its quarterly TDS statement, and the figures then flow to your annual tax statement.

GST turnover. The annual statement also shows the turnover you reported in GSTR-3B for each GSTIN under your PAN.

Your return. The turnover in your income-tax return comes from your books. In the books, sales are net of returns and exclude GST.

These three are prepared on different bases. They will rarely match exactly, and they are not expected to. What matters is that you can explain the difference.

Why the figures differ

• Returns and cancellations. TDS is often deducted on the sale when it is credited. A later return is not always reversed in the TDS statement, so the statement can show more than your net sales.
• GST inside the amount. The TDS base can include or exclude GST, depending on how the invoice shows it (see the box below). Your books exclude GST.
• Year-end timing. A sale shipped in March may be credited, and TDS deducted, in April, or the other way round.
• Sales that are not your income. These include shipping charges collected on behalf of a courier, and amounts the marketplace collects and pays out for a promotion it funds. The treatment depends on your contract with each marketplace, so check it.
• Several GSTINs, one PAN. The GST turnover is per GSTIN, and the TDS is per PAN. Stock transfers between your own GSTINs are taxable supplies for GST, but not sales for income tax.
• A wrong PAN, or another person's data. A marketplace can quote the wrong PAN or report another seller's sales against yours. These can be corrected only by the marketplace revising its TDS statement.

Step-by-step: how to deal with a mismatch query

1. Download the annual statement and the summary. Download the Annual Information Statement and the Taxpayer Information Summary from the compliance portal on the income-tax e-filing site. Note each marketplace entry: the deductor name, its TAN, the amount and the TDS.
2. Download the marketplace reports. For each marketplace, download its TDS certificate or statement and its settlement and returns reports for the tax year.
3. Build a reconciliation for each marketplace:
   • start with the gross amount in the annual statement;
   • take away returns and cancellations;
   • take away GST included in the amount;
   • add or take away the year-end timing items;
   • take away amounts collected for others.
   • What is left should equal the sales for that marketplace in your books.
4. Do the same for GST turnover. Start from GSTR-3B turnover for each GSTIN. Take away stock transfers between your own GSTINs and other supplies that are not sales. The total should come to the turnover in your books.
5. Give feedback in the annual statement where a figure is wrong. The compliance portal lets you mark an entry with options such as:
   • information is correct;
   • information is not fully correct;
   • relates to another PAN or year;
   • duplicate;
   • denied. Use the option that matches the facts, and keep a copy. Feedback does not change the marketplace's TDS statement. Ask the marketplace to revise its statement if it quoted the wrong PAN or amount.
6. Reply to the query on the portal. Attach the reconciliation, and answer only what is asked.
7. Claim the TDS credit in full. It should match your annual statement. A credit missing from the statement cannot usually be claimed until the marketplace corrects its TDS statement.

Documents to gather

• The annual statement, the summary, and the TDS certificates from each marketplace.
• Settlement reports, and order-level sales and returns reports, for each marketplace for the tax year.
• Your sales register by channel, with GST shown separately.
• GSTR-3B and GSTR-9 for each GSTIN, plus the stock-transfer register between your GSTINs.
• The GST-to-income-tax turnover reconciliation. The reconciler tool below prepares one.

How to word a reply

The amount of [amount] reported by [marketplace] (TAN [number]) is the gross value of orders credited during the tax year. It includes [amount] of orders later returned or cancelled, [amount] of GST, and [amount] of orders shipped in the previous year but credited this year. After these, sales through [marketplace] were [amount], which is included in the turnover returned. A reconciliation for each marketplace is attached.

Consequences of leaving it unexplained

The department can treat an unexplained gap as income that was not reported. For tax year 2026-27 onwards, reassessment is covered by sections 279 to 286 of the Income-tax Act, 2025. These replace sections 147 to 153 of the 1961 Act, which still apply to earlier years. The time limits for reopening depend on the amount involved. A gap that can be explained is far cheaper to explain early, while the reports are still easy to download.

Common mistakes

• Raising turnover to match the annual statement. Tax then becomes payable on returns and on GST that were never income.
• Reporting turnover from the GST return without adjusting for stock transfers. Stock transfers between your own GSTINs are not sales for income tax.
• Missing TDS credit. Credit is lost when a marketplace quotes the wrong PAN and nobody asks it to correct the TDS statement.
• Marking a correct entry as "denied" to make the gap disappear. Feedback is checked against the marketplace's data. A wrong denial weakens every other explanation you give.

Preventing it next time

• Reconcile each quarter. Each quarter, compare every marketplace's TDS figures with your books, while the reports for that quarter are still easy to get.
• Check your PAN and GSTIN. Make sure every marketplace has your correct PAN and GSTIN.
• Keep the year-end cut-off. Keep the year-end reconciliation with your tax return working papers.

When to take professional help

Take help when:

• the notice is a reassessment notice, not a query;
• the gap is large and you cannot explain it from the reports;
• a marketplace will not correct a wrong PAN entry.

A reassessment notice has formal stages, and the time limits to respond are strict.