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Income-tax Act, 2025High impact for ecommerce sellers

Income-tax Act 2025: TDS consolidated in Section 393, and Board guidelines under Section 400(2)

Reviewed by CA Apurav GargSummary reviewed

Document
Income-tax Act, 2025: Sections 393 and 400
Issued
1 Apr 2026
Effective
2026-04-01 (Tax Year 2026-27 onwards)
Issued by
Parliament of India (text as published by CBDT)
Official PDF(opens in a new tab)

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On this page

What it means for ecommerce sellers

From 1 April 2026 (Tax Year 2026-27), the Income-tax Act, 2025 replaces the separate TDS sections of the 1961 Act with tables in Section 393. Section 393(1) covers payments to residents (commission, rent, contractors, professional and technical fees, purchase of goods, business benefits and e-commerce sales), 393(2) payments to non-residents and 393(3) payments to any person. For an ecommerce seller the rates in the extract below are unchanged in substance: e-commerce operators deduct 0.1% of gross sales (Sl. No. 8(v)), goods buyers deduct 0.1% above ₹50 lakh (Sl. No. 8(ii)) and business benefits attract 10% above ₹20,000 (Sl. No. 8(iv)). Section 400(2), substituted by the Finance Act 2026, lets the Board issue guidelines that bind the income-tax authorities and the person deducting tax. Older circulars on 194-O and 194R should be read alongside the new section numbers.

Who it affects

  • Every business that deducts TDS
  • E-commerce operators and marketplace sellers
  • Brands paying influencers, agencies, contractors, landlords and logistics partners
  • Anyone paying non-residents (Section 393(2))

Before and after

  • TDS by e-commerce operators

    Before
    Section 194-O, Income-tax Act 1961
    After
    Section 393(1) Table Sl. No. 8(v): 0.1% of gross amount. Threshold Nil, except that individual and HUF sellers with PAN or Aadhaar furnished have no TDS while their gross sales or services through the operator stay within ₹5 lakh in the tax year

  • TDS on purchase of goods

    Before
    Section 194Q
    After
    Section 393(1) Table Sl. No. 8(ii): 0.1%

  • TDS on business benefits or perquisites

    Before
    Section 194R
    After
    Section 393(1) Table Sl. No. 8(iv): 10%, threshold ₹20,000

  • Contractors, professional and technical fees

    Before
    Sections 194C and 194J
    After
    Section 393(1) Table Sl. No. 6

  • Board guidelines to remove difficulties

    Before
    Section-specific powers, e.g. 194-O(4), 194R(2)
    After
    Section 400(2): one power for the whole Chapter, binding on authorities and deductors

What to do

  1. Map each TDS section used in your accounting software to its Section 393 table serial number from 1 April 2026.
  2. Check that TDS returns and certificates for Tax Year 2026-27 quote the new section references.
  3. Keep using the 194-O and 194R circulars as guidance, read with the new serial numbers, until new guidelines are issued.

Provisions referred to: Section 393(1) Income-tax Act, 2025; Section 393(2); Section 393(3); Section 400(2); Sections 194C, 194H, 194I, 194J, 194-O, 194Q, 194R and 195 of the 1961 Act

Related tools and services

Official text

As issued by Parliament of India (text as published by CBDT). Where the text starts with “Extract”, only the parts that concern ecommerce sellers are reproduced; the official PDF (opens in a new tab) is the authoritative version.

Type a word, number or section to highlight it below.

Extract: the parts of the official text that this update relates to. Omitted passages are marked […]. The complete document is at the official link above. 393. (1) Where any income or sum of the nature specified in column B of the Table below, is credited or paid or distributed by the person specified in column C during the tax year, to a resident, the person responsible for paying such income or sum shall deduct income-tax,— (a) on the entire amount of such income or sum, where the amount or aggregate of amounts exceeds the threshold limit specified in column D, or on sum as per Note 1 for serial number 8(ii), as the case may be; (b) at the rate specified in column D; (c) at the time of credit of such income or sum to the account of the payee or at the time of its payment in cash or by way of a cheque or a draft or by any other mode, whichever is earlier; and (d) subject to the provisions of sub-sections (4), (5), (6), (8) and (9). TABLE FOR PAYMENTS TO RESIDENT Sl. No. Nature of Income or sum Payer Rate Threshold limit A B C D 1. Commission or brokerage (i) Any income by way of remuneration or reward, whether by way of commission or otherwise, for soliciting or procuring insurance business (including business relating to the continuance, renewal or revival of insurance policies). Any person. Rate: Rates in force. Threshold limit: ₹ 20,000. (ii) Any income by way of commission [not being insurance commission referred to in serial number 1(i)] or brokerage. Specified person. Rate: 2% Threshold limit: ₹ 20,000. 2. Rent (i) Any income by way of rent. Person other than specified person. Rate: 2% Threshold limit : ₹ 50,000 for a month or part of a month. (ii) Any income by way of rent. Specified person. Rate: (a) 2%, for the use of any machinery or plant or equipment; and (b) 10%, for the use of any land, or building (including factory building), or land appurtenant to a building (including factory building), or furniture, or fittings. Threshold limit [for (a) and (b)]: ₹ 50,000 for a month or part of a month. Note 1.-In serial number 2(i), the tax shall be deducted on such income at the time of— (a) credit of rent to the account of the payee; or (b) payment thereof in cash or by way of a cheque or a draft or any other mode, whichever is earlier, for the last month of the tax year or the last month of tenancy. […] 6. Payments to contractors, fees for professional and technical services, etc. (i) Any sum for carrying out any work (including supply of labour for carrying out any work) in pursuance of a contract between the contractor and a designated person. Any designated person. Rate : (a) 1%, if contractor is individual or Hindu undivided family; (b) 2%, if contractor is a person other than the person mentioned in (a). Threshold limit: [for (a)and (b)] (a) ₹ 30,000; for any such sum; and (b) ₹ 1,00,000 in case of aggregate of such sums. (ii) Any sum— (a) for carrying out any work (including supply of labour for carrying out any work) in pursuance of a contract; or (b) by way of fees for professional services; or (c) by way of commission [not being insurance commission referred to in serial number 1(i)] or brokerage. No. 6(i) and (iii) or Sl. No. 1(ii)]. Rate: 2% Threshold limit: Fifty lakh rupees. (iii) Any sum by way of— (a) fees for professional services; or (b) fees for technical services; or (c) remuneration or fees or commission by whatever name called, other than those on which tax is deductible under section 392, to a director of a company; or […] 8. Other cases (i) Any sum under a life insurance policy, including the sum allocated as bonus on such policy, other than the amount not includible in the total income under Schedule II (Table: Sl. No. 2). Any person. Rate : 2% on income comprised in such sum. Threshold limit: ₹ 1,00,000. (ii) Any sum exceeding fifty lakh rupees for purchase of any goods. Any person, being a buyer. Rate: 0.1% Threshold limit: As per Note 1. (iii) Total income of a specified senior citizen after giving effect to deduction allowable under Chapter VIII and rebate allowable under section 156. Specified bank. Rate: Rates in force. Threshold limit: As applicable. (iv) Any benefit or perquisite, whether convertible into money or not, arising from business or the exercise of a profession of any resident. Specified person. Rate: 10% of value or aggregate of values of such benefit or perquisite. Threshold limit: ₹ 20,000. (v) Any sum on account of sale of goods or provision of services by an e-commerce participant, facilitated by an e-commerce operator through its digital or electronic facility or platform. Any e-commerce operator. Rate: 0.1% of gross amount of such sale or services or both. Threshold limit: Nil. (vi) Any sum by way of consideration for transfer of a virtual digital asset. Any person. Rate: 1% Threshold limit: Nil. Note 3.-In respect of serial number 8(v)— (a) for deduction of tax, the provisions thereof shall take precedence over any other provisions of this Chapter; (b) any payment made by a purchaser of goods or recipient of services directly to an e-commerce participant for the sale of goods or provision of services or both, facilitated by an e-commerce operator, shall be deemed to be the amount credited or paid by the e-commerce operator to the e-commerce participant and this amount shall be included in the gross amount of such sale or services for the purposes of deduction of income-tax under this serial number; (c) e-commerce operator shall be deemed to be the person responsible for paying to e-commerce participant; (d) irrespective of anything contained in this Chapter, if— (i) tax has been deducted on a transaction under this serial number; or (ii) a transaction is not liable for tax deduction as provided in section 393(4) (Table: Sl. No. 11), then tax shall not be deducted on such transaction under any other provision of this Chapter; (e) clause (d) shall not apply to any amount or aggregate of amounts received or receivable by an e-commerce operator for— (i) hosting advertisements; or (ii) providing any other services, which are not in connection with the sale or services referred to in this serial number. […] (2) Where any income or sum of the nature specified in column B of the Table below, is credited or paid by the person specified in column D during the tax year, to a non-resident specified in column C, the person responsible for paying shall such income or sum shall deduct income-tax on the amount of such income or sum,— (a) at the rate specified in column E; (b) at the time of credit of income or sum to the account of the payee or at the time of its payment in cash or by way of a cheque or a draft or by any other mode, whichever is earlier; and (c) subject to the provisions of sub-sections (4), (8) and (9). […] (3) Where any income or sum of the nature specified in column B of the Table below, is credited or paid by the person specified in column C during the tax year, to any person, the person responsible for making payment of such income or sum, shall deduct income-tax— (a) on the entire amount of such income or sum, where the amount or aggregate of amounts exceed the threshold limit specified in column D, or on net winnings as per Note 1 of the Table; (b) at the rate specified in column D; (c) at the time of payment thereof in cash or by way of a cheque or a draft or by any other mode, or as specified therein; and (d) subject to the provisions of sub-sections (4), (5), (6), (8) and (9). […] Income-tax Act, 2025 Section 400. Power of Central Government to relax provisions of this Chapter. 400. (1) The Central Government may, by notification provide that deduction or collection of tax shall not be made or is to be made at such lower rate, from such payment or receipt and in respect of such person or class of persons. [(2) The Board may, with the previous approval of the Central Government, issue guidelines to remove any difficulty arising in giving effect to the provisions of this Chapter and such guidelines shall be— (a) binding on the income-tax authorities and on the person liable to deduct or, as the case may be, collect income-tax; and (b) laid before each House of Parliament.] Footnote: Sub-section (2) substituted by Act No. 4 of 2026, w.e.f. 1-4-2026. Prior to its substitution, sub-section (2) read as under: "(2) The Board may issue guidelines with the previous approval of the Central Government, to remove any difficulty arising in giving effect to the provisions of this Chapter and these guidelines shall be laid before each House of Parliament."

Questions sellers ask

Where is Section 194-O in the Income-tax Act 2025?

TDS by e-commerce operators is in Section 393(1), Table serial number 8(v): 0.1% of the gross amount of sale of goods or provision of services, with Note 3 carrying over the deemed-payment and no-double-deduction rules. Individual and HUF sellers who have furnished PAN or Aadhaar continue to have no TDS deducted while their gross sales or services through the operator stay within ₹5 lakh in the tax year.

When does the Income-tax Act 2025 apply to TDS?

From 1 April 2026, for Tax Year 2026-27 onwards.

What does Section 400(2) of the Income-tax Act 2025 do?

It lets the Board, with the previous approval of the Central Government, issue guidelines to remove difficulties in the TDS and TCS Chapter. As substituted by the Finance Act 2026, such guidelines bind the income-tax authorities and the person deducting or collecting tax, and are laid before Parliament.

Is TDS on rent still 10% for buildings?

Under Section 393(1) Sl. No. 2(ii), a specified person deducts 10% on rent for land, building, furniture or fittings and 2% for plant, machinery or equipment, above ₹50,000 for a month or part of a month.

Want help working out what this means for your business?

We handle GST and TDS compliance, returns and notice replies for D2C and marketplace sellers, and can walk you through how a change applies to your books.

Contact usWhatsApp us

General information only, not professional advice. The summary is ecomca’s reading of the document; the official PDF is the authoritative version, and later amendments may change it. Check the official source before you act.