Amazon TDS 2026-27: Section 393, 194-O Transition, Ads & LDC

Last reviewed: 11 September 2026. For Tax Year 2026-27, Amazon-related TDS must be analysed under the Income Tax Act, 2025. The old section 194-O e-commerce rule maps into section 393. However, marketplace withholding, advertising invoices, logistics/service charges and other seller-side payments should not automatically be given the same TDS treatment.

Amazon TDS: answer first

Old 194-O to current section 393

Section 194-O belongs to the Income-tax Act, 1961. For payments or credits from 1 April 2026, the Income Tax Act, 2025 applies and the corresponding e-commerce withholding rule is consolidated into section 393. The old section name remains useful for historical records and search terminology, but accounts and ERP teams should use the current-law classification for Tax Year 2026-27 reporting.

The old section 194-O rate was reduced from 1% to 0.1% with effect from 1 October 2024. Do not use outdated articles or ERP masters that still carry the earlier 1% rate.

Do not apply one Amazon rate to every charge

Amazon settlement statements and invoices can contain different commercial flows. The platform may deduct tax from seller proceeds under the e-commerce rule, while the seller may separately pay for advertising, fulfilment, services or other charges. Analyse each material payment according to the agreement, invoice, legal payee and nature of service.

Lower or nil deduction certificate controls

• Match the exact legal name and PAN of the certificate holder.
• Confirm the certificate covers the relevant payment category/current section.
• Check the validity period.
• Track the authorised amount and utilised balance.
• Use only the specified rate for covered payments.
• Retain verification evidence with the TDS working.

The Income Tax Department's current forms guidance should be checked for the applicable lower/nil withholding process under the 2025 Act. Do not reuse an old certificate simply because the vendor name has not changed.

Accounts and ERP checklist

1. Separate marketplace, advertising, fulfilment/logistics, rent-like and professional/technical charges where tax treatment can differ.
2. Map each Amazon legal entity and PAN correctly.
3. Maintain a certificate master with rate, section/item, validity and limit.
4. Reconcile invoices, settlement statements, general ledger and withholding calculations monthly.
5. Use current-law section references for post-1-April-2026 transactions.
6. Document the classification when a charge is ambiguous.

Worked examples

Marketplace sale: Where an e-commerce operator facilitates a qualifying seller transaction, operator-side withholding is analysed under the current e-commerce item in section 393. That deduction does not automatically determine the seller's TDS treatment on separate invoices received from the platform.

Advertising invoice: A seller paying a separate advertising invoice should classify that service independently. If a valid lower deduction certificate covers the exact payee and payment, use it only within its terms.

Old certificate: Never carry an old lower-deduction rate into TY 2026-27 without checking whether the certificate remains legally valid for the current payment, period and amount.

Frequently asked questions

Official references

• Income Tax Department — tax payments/TDS transition guidance
• Income Tax Department — Income Tax Forms

This guide addresses Indian TDS compliance and should be applied to the exact contract, payee and transaction facts.

Frequently Asked Questions