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CMA Final · Direct Tax Laws and International Taxation · E-commerce Transaction and Liability in Special Cases

Ananya, an individual, sells handicrafts through an online platform run by Bazaarly Ltd, an e-commerce operator. Her gross sales through the platform in the tax year are Rs. 4,20,000. She has furnished her PAN to the operator. What tax must Bazaarly Ltd deduct on these payments under section 393(1) Table Sl. No. 8(v)?

No tax must be deducted. Ananya is an individual, her gross sales of Rs. 4,20,000 do not exceed Rs. 5,00,000, and she has furnished her PAN. All the conditions for no deduction under section 393(4) for e-commerce payments are satisfied, so the 0.1% deduction does not apply.

  1. ARs. 420
  2. BRs. 4,200
  3. CRs. 8,400
  4. DNilCorrect

Explanation

Under section 393(4) (Table Sl. No. 11), no deduction is made where the participant is an individual or HUF, gross sales or services in the tax year do not exceed Rs. 5,00,000 and PAN or Aadhaar has been furnished. All three conditions are met: Rs. 4,20,000 is within the limit. Rs. 420 is 0.1% and would be wrong because the exemption applies.

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