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

Under section 393(1) of the Income-tax Act, 2025 (Table Sl. No. 8(v)), at what rate must an e-commerce operator deduct tax on the gross amount of sales or services made by an e-commerce participant through its platform?

The e-commerce operator deducts tax at 0.1% of the gross amount of sales or services or both made through its platform. The rate comes from serial number 8(v) of the section 393(1) Table, with a nil threshold. The 1% rate relates to virtual digital assets instead.

  1. A0.1% of the gross amountCorrect
  2. B1% of the gross amount
  3. C2% of the gross amount
  4. D10% of the gross amount

Explanation

Serial number 8(v) of the Table in section 393(1) prescribes tax deduction by an e-commerce operator at 0.1% of the gross amount of sale or services or both. The threshold limit is nil. The 1% rate applies to consideration for transfer of a virtual digital asset, not to e-commerce payments.

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