Skip to content

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

QuickMart, an e-commerce operator, receives Rs. 8,00,000 from a participant, Ritu Enterprises Pvt. Ltd., for hosting advertisements on its platform. The sum is unrelated to any sale facilitated. Which statement is correct under the Income-tax Act, 2025?

The sum for hosting advertisements is not protected by the 0.1% e-commerce rule, because amounts for advertisements or other services unconnected with facilitated sales are carved out. Other TDS provisions of the Chapter can therefore still apply to such payment.

  1. AThe 0.1% e-commerce deduction does not shield this sum; deduction under other provisions of Chapter may still apply to itCorrect
  2. BNo tax can ever be deducted on it because the e-commerce rule takes precedence over all provisions
  3. CIt is deducted at 0.1% as it is received by an e-commerce operator
  4. DIt is exempt because Ritu Enterprises is a participant

Explanation

Note 3(d) bars deduction under other provisions where tax was deducted under 8(v). Note 3(e) says this bar does not apply to amounts for hosting advertisements or other services not connected with the facilitated sales. So other TDS provisions can still apply to the advertisement amount. The claim that 8(v) overrides everything ignores Note 3(e).

Did you get it right without looking?

One question tells you little. A timed set on E-commerce Transaction and Liability in Special Cases shows your real accuracy, how long you take and where you lose marks.

Practise E-commerce Transaction and Liability in Special CasesFree diagnostic mock

More E-commerce Transaction and Liability in Special Cases questions