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

Kartik, an individual resident, sells handicrafts through the platform of ShopBazaar Ltd., an e-commerce operator, and has furnished his PAN. His gross sales through the platform in the tax year are Rs. 4,80,000. How is TDS applied to him by the operator for serial number 8(v)?

No tax is deducted. An individual or HUF participant whose gross sales or services in the tax year do not exceed Rs. 5,00,000, and who has furnished PAN or Aadhaar, falls under the no-deduction table. Kartik at Rs. 4,80,000 with PAN qualifies.

  1. ANo tax is deducted, as he is an individual with gross sales not above Rs. 5,00,000 and has furnished PANCorrect
  2. BTax of Rs. 480 is deducted at 0.1%
  3. CTax of Rs. 4,800 is deducted at 1%
  4. DTax is deducted at 0.1% only on the amount above Rs. 1,00,000

Explanation

Section 393(4), Table serial number 11, excludes from deduction a payment to an individual or HUF where gross sales or services in the tax year do not exceed Rs. 5,00,000 and PAN or Aadhaar has been furnished. Kartik meets all three conditions, so no deduction applies. Rs. 480 would be right only if the exemption did not apply.

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