Content authored by practitioners with experience at Amazon India, Intuit QuickBooks, and the Tata Group. Meet the team →
A seller sees two tax lines on each marketplace payout and treats them as fees, losing the credit or double-counting cost.
Identify each line by law: income-tax TDS on gross sales under Section 194O or Section 393, and GST TCS on net taxable value under Section 52; book both as receivables, not costs.
Weekly settlement reports, a TDS Receivable ledger, a GST TCS Receivable ledger, the TDS credit statement and the GST portal TCS credit view.
Every rupee of tax deducted by the marketplace is booked as a credit and later ticked off against the portal where it should appear.
Two different taxes can appear on one marketplace payout. One is income-tax TDS under Section 194O of the Income-tax Act 1961, which from 1 April 2026 sits in Section 393 of the Income-tax Act 2025 (payment code 1035). The other is GST TCS under Section 52 of the CGST Act 2017. Both are your own tax paid in advance by the marketplace on your behalf. They are not fees, and you can claim both back.
Which deduction is it?
| Line | Law | Who deducts | Base | Rate as notified | Where the credit shows |
|---|---|---|---|---|---|
| TDS | Section 194O (now Section 393, code 1035) | E-commerce operator | Gross amount of sales | 0.1 percent from 1 October 2024 | Form 26AS, or Form 168 from tax year 2026-27 |
| GST TCS | Section 52, CGST Act | E-commerce operator | Net value of taxable supplies | 0.5 percent from 10 July 2024 | GST portal, then your electronic cash ledger |
| GST on fees | GST law | Marketplace as service provider | Commission and fees | Typically 18 percent | Your GSTR-2B as input tax credit |
| Plain fee | Seller agreement | Marketplace | As per fee schedule | Per schedule | Fee invoice |
Before these dates both rates were 1 percent, which is why older payouts and older articles show higher figures.
Is TDS deducted if I am an individual selling below ₹5 lakh a year?
No, if you meet both conditions. The operator does not deduct TDS for a resident individual or HUF whose gross sales through it do not exceed ₹5 lakh in the year, and who has furnished PAN or Aadhaar. Companies, firms and LLPs see TDS from the first rupee. If you have not given PAN or Aadhaar at all, a higher rate under the PAN rules can apply, so keep your seller profile complete.
GST TCS has its own rules. If you are registered under GST and sell through an operator, expect TCS on your taxable supplies.
Is the tax charged before or after the marketplace fees?
Before. Both are worked out on your sales, not on what is left after fees.
- TDS is on the gross amount of sales or services. The CBDT has issued circulars on how the gross amount is worked out; check the operator’s TDS certificate if your figure looks odd.
- TCS is on the net value of taxable supplies, which means sales minus returns in the period, excluding the GST itself.
So the commission does not reduce the base for either tax.
A worked example
A company sells one item for ₹10,000 of taxable value, with GST of ₹500 at 5 percent charged separately, so the customer pays ₹10,500. Figures are illustrative.
| Line on payout | Calculation | Amount |
|---|---|---|
| TDS at 0.1 percent | 0.1 percent of ₹10,000 gross sale | ₹10 |
| GST TCS at 0.5 percent | 0.5 percent of ₹10,000 net taxable value | ₹50 |
| Commission (illustrative 10 percent) | 10 percent of ₹10,000 | ₹1,000 |
| GST at 18 percent on commission | 18 percent of ₹1,000 | ₹180 |
Total deducted: ₹10 + ₹50 + ₹1,000 + ₹180 = ₹1,240. Payout: ₹10,500 − ₹1,240 = ₹9,260.
Of the ₹1,240, the ₹10 TDS and ₹50 TCS are tax credits. The ₹180 GST on commission is usually input tax credit. Only the ₹1,000 commission is a true cost.
How do I book it?
When the payout arrives: debit Bank ₹9,260, Commission ₹1,000, Input GST ₹180, TDS Receivable ₹10 and GST TCS Receivable ₹50, and credit the marketplace receivable ₹10,500. Keep TDS and TCS in separate ledgers, because they are checked against different portals.
What to read next
Both deductions come back to you only if the operator reports them correctly. Read where to see TDS and TCS deducted by a marketplace, then the Section 194O operator versus participant guide and TCS reconciliation for e-commerce operators. TransactIG reconciles TDS, matching what you booked against your TDS credit statement, which is covered on the TDS reconciliation software page.
Content authored by practitioners with experience at Amazon India, Intuit QuickBooks, and the Tata Group. Meet the team →