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Hotels paying commission to MakeMyTrip, Goibibo, Yatra, and OYO domestic must deduct 5% TDS on commission, but the deduction code changed on April 1, 2026 — Section 194H is replaced by Section 393(1)(f) with payment code 1007. Cross-era cases mix old and new codes in the same matching run, e-commerce operator bookings under the OTA's own withholding must be excluded from 393(1)(f), and the hotel's challan, Form 16A, Form 131, and the OTA's Form 168 all must reconcile at deductee level.
For every commission invoice, classify whether the booking is in agency mode or e-commerce operator mode. Apply 393(1)(f) and code 1007 only to agency-mode commission. Tag each deduction with its deduction date, route to the correct section based on date — pre-April 1 entries to legacy 194H, post-April 1 to 393(1)(f). Match the hotel's Challan 281 to Form 26Q, then Form 131, then the OTA's Form 168 at deductee level. Keep INR commission and foreign-currency-equivalent legs on separate ledger lines so forex variance does not contaminate the TDS base.
OTA settlement file connector with mode flag (agency vs e-commerce operator); commission invoice ledger with deduction-date tag; section mapping master with both 194H and 393(1)(f) entries; Challan 281 link to Form 26Q line item; Form 131 generator at deductee level; reconciliation rule that excludes e-commerce operator bookings from the 393(1)(f) calculation.
A reconciled commission TDS ledger where every domestic OTA invoice is tagged with the correct section and code on its deduction date, the hotel's Challan 281 reconciles to Form 26Q, Form 131 issued to each OTA matches Form 168 entries at the OTA's end, and cross-era cases route correctly without manual intervention.
A 110-room property in Jaipur pays monthly commission invoices to MakeMyTrip, Goibibo, Yatra, and OYO domestic. The aggregate commission outflow is large enough that a 5% TDS deduction error on a single quarter shows up as a Form 168 mismatch the OTA’s tax team will surface within weeks. From April 1, 2026, the deduction sits under Section 393(1)(f) of the Income Tax Act 2025 with payment code 1007 — not under the legacy Section 194H reference that applied through FY 2025-26. This article is for hotel finance teams reconciling the deductor side of OTA commission TDS in India.
The Income Tax India e-filing portal is the authoritative source for the Section 393 sub-clauses and the payment code list. For broader deductor and deductee-side mechanics, see Section 393 under the new Income Tax Act 2025 and the TDS payment codes 1001–1092 reference.
What Section 393(1)(f) Means for Hotels Paying Domestic OTAs
Section 393 of the Income Tax Act 2025 consolidates resident-side TDS provisions. Sub-clause (f) covers commission and brokerage — the same scope previously held by Section 194H of the Income Tax Act 1961. From April 1, 2026, every commission deduction made by a hotel to a resident OTA such as MakeMyTrip, Goibibo, Yatra, or OYO domestic is reported under 393(1)(f) with payment code 1007 on Challan 281 and on Form 26Q.
The rate remains 5% on commission paid to a resident, with the threshold of ₹15,000 per annum carried forward from the legacy provision. The hotel is the deductor; the OTA is the deductee. The OTA’s tax credit appears in Form 168 — the deductee-side annual statement under the new Act — tagged against the hotel’s TAN.
Why This Article Looks at the Hotel’s Side
Existing hospitality cluster articles treat the OTA settlement reconciliation from the hotel’s revenue-recognition lens — what comes in, how room revenue is grossed up, how commission GST is split as ITC. The hotel-as-deductor angle is different. Here the focus is the outbound TDS register: the commission paid out, the 5% withheld, the challan deposit, and the certificate trail back to the OTA.
How the Reconciliation Works End to End
Step 1: Identify Mode per Booking
The OTA settlement file marks each booking as either agency-mode or e-commerce operator mode. Section 393(1)(f) and code 1007 apply only to agency-mode commission — the cases where the hotel collects from the guest, the OTA raises a commission invoice, and the hotel pays after withholding TDS. E-commerce operator bookings, where the OTA collects from the guest and remits net of its own 1% withholding, are out of scope for 393(1)(f).
Step 2: Tag the Deduction Date
For every line in the commission ledger, store the deduction date — the date of credit in the books or the date of payment, whichever is earlier. The matching engine routes on this date. Entries dated up to March 31, 2026 stay under the legacy 194H section reference on the original challan and Form 16A, even if the return is filed after April 1. Entries dated April 1, 2026 onwards carry 393(1)(f) and code 1007.
Step 3: Handle INR vs Foreign-Currency Commission Legs
Domestic OTAs invoice predominantly in INR, but inbound foreign-currency settlements — international guests booking through MakeMyTrip or Goibibo — can produce a separate INR-equivalent commission leg. The TDS base is the rupee value at credit date. Forex variance to payment date is a separate ledger entry and does not adjust the TDS already deducted. Keeping these on three distinct lines (INR commission, forex movement, final settlement) is the cleanest way to keep Form 16A reconciliation tight.
Step 4: Match Challan to Return to Certificate
The hotel deposits the deducted amount via Challan 281 by the 7th of the following month. Each challan is linked to one or more Form 26Q line items in the quarterly return. Form 131 — the deductee-wise certificate under the new Act — is then generated for each OTA. The OTA pulls Form 168 from the e-filing portal and reconciles it to the Form 131 received from the hotel.
Cross-Era Reference Table
| Element | Up to March 31, 2026 | From April 1, 2026 |
|---|---|---|
| Section reference | Section 194H, IT Act 1961 | Section 393(1)(f), IT Act 2025 |
| Payment code (Challan 281) | 94H | 1007 |
| Rate on resident commission | 5% | 5% |
| Annual threshold | ₹15,000 | ₹15,000 |
| Deductee-side statement | Form 26AS | Form 168 |
| Deductor-side certificate | Form 16A | Form 131 |
| Quarterly return | Form 26Q | Form 26Q (refreshed schema) |
India Compliance Angle: Multi-OTA Aggregation
A property running on four domestic OTAs simultaneously — MakeMyTrip, Goibibo, Yatra, OYO domestic — produces four separate Form 131 outputs at year-end, each of which must reconcile to the OTA’s Form 168 view. Where the hotel’s reconciliation ledger collapses all OTA commission into a single GL account without preserving deductee TAN-level detail, the certificate generation step has to retroactively split the aggregate, which is where transcription errors creep in.
Reconciliation software India tooling that ingests OTA settlement files alongside the commission invoice ledger can preserve booking-level detail through to certificate generation. For hotels where commission settlement also flows through gateway payouts, the same pipeline can absorb payment gateway reconciliation inputs. The pillar hotel reconciliation in India sets out how this fits with the rest of the hospitality finance stack.
For the broader hotel industry reconciliation surface, see the Hotels & Hospitality industry guide.
The following questions address the hotel-as-deductor TDS issues that recur across domestic OTA contracts.