Marketplaces deduct tax from your payouts under two different laws. Here's what each one is and how to get the credit.
If you sell on Amazon, Flipkart, Meesho or similar, you'll notice tax deducted from your settlements. There are actually two separate mechanisms — TCS under GST and TDS under income tax (Section 194-O). They're easy to confuse.
Marketplaces collect Tax Collected at Source on the net value of taxable supplies and deposit it against your GSTIN. You claim it in your GST returns, where it reduces your output tax liability.
Section 194-O requires e-commerce operators to deduct income-tax TDS on the gross amount of your sales. This is credited to your PAN and adjusts against your income-tax liability — reducing the advance tax you need to pay.
| Feature | GST TCS | 194-O TDS |
|---|---|---|
| Law | GST | Income tax |
| Credited to | GSTIN | PAN |
| Claimed in | GST returns | Income tax return |
| Reduces | Output GST | Income tax / advance tax |
Because tax is collected upfront, your effective advance-tax outflow is smaller. Model it using the Income Tax Calculator.
Our in-house CA & CS team set up your virtual office, VPOB and GST end to end — from ₹15,290/yr.
💬 Talk to our team View plans →TCS is a GST mechanism credited to your GSTIN; 194-O TDS is income tax credited to your PAN. You claim them in different returns.
In your Form 26AS and Annual Information Statement (AIS). Claim it when filing your income-tax return.
Yes. GST TCS offsets output GST, and 194-O TDS reduces your income-tax and advance-tax liability.
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