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GST TCS and 194-O TDS on marketplace payouts, explained for sellers
By the TruePayout team · Updated · 3 min read
Quick answer
Marketplaces in India withhold two taxes from seller payouts: GST TCS at 0.5% of net taxable supplies (since 10 July 2024) and income tax TDS under section 194-O at 0.1% of gross sales (since 1 October 2024). Neither is a loss: TCS is credited to your GST cash ledger and TDS appears in Form 26AS against your income tax.
Key points
- GST TCS: 0.5% of net taxable supplies, collected by the e-commerce operator since 10 July 2024 (earlier 1%).
- Income tax TDS under section 194-O: 0.1% of gross sales since 1 October 2024 (earlier 1%).
- TCS shows in your GST portal and can be claimed in your GST cash ledger.
- TDS shows in Form 26AS and is adjusted against your income tax.
- These are legitimate deductions, so a reconciliation should treat them as explained, not as a shortage.
The two taxes withheld
| Tax | Law | Current rate | Where you see it | How you get it back |
|---|---|---|---|---|
| GST TCS | Section 52, CGST Act | 0.5% of net taxable supplies (since 10 July 2024) | GST portal, TCS credit received | Accept it and it reaches your electronic cash ledger |
| Income tax TDS | Section 194-O, Income-tax Act | 0.1% of gross sales (since 1 October 2024) | Form 26AS and AIS | Adjusted against your income tax when you file |
Why this matters for reconciliation
Because TCS and TDS are taken before your payout, the bank credit is always a little less than the order value minus fees. A good reconciliation separates these taxes from real shortages so you never raise a claim for a legitimate deduction, and never miss a real one.
Check it yourself
Rates and rules change. Confirm the current rates with your chartered accountant or the official GST and income tax portals before filing.
TruePayout treats TCS and TDS as statutory withholding: shown in every payout explanation, never counted as money missing.
Frequently asked questions
What is the TCS rate for e-commerce sellers?
0.5% of net taxable supplies, collected by the e-commerce operator, since 10 July 2024. Before that it was 1%.
What is the TDS rate under section 194-O?
0.1% of the gross amount of sales since 1 October 2024. Before that it was 1%.
Can I get TCS back?
Yes. The TCS collected appears on the GST portal; once accepted, it is credited to your electronic cash ledger and can be used to pay GST or refunded under the rules.