Finance Minister Slashes TDS Rate For Ecommerce Operators To 0.1% To Boost Sector Growth
The budget also proposes the creation of dedicated ecommerce export hubs, aiming to significantly boost India's online trade
Finance Minister Nirmala Sitharaman announces a reduction in the Tax Deducted at Source (TDS) rate for ecommerce operators in a significant budgetary move aimed at invigorating India's e-commerce sector.
Effective from the upcoming fiscal period, the TDS rate will be slashed from 1 per cent to just 0.1 per cent. This adjustment is designed to alleviate working capital pressures for sellers on major e-commerce platforms such as Flipkart, Amazon, Swiggy, and Zomato.
This reform is part of the new Modi 3.0 government's comprehensive budget strategy, which includes merging tax exemption regimes, decriminalising TDS delays, and overhauling customs duties. Additionally, Sitharaman revealed that the Equalisation Levy—previously set at 2 per cent on ecommerce transactions—will be phased out by August 2024.
The budget also proposes the creation of dedicated ecommerce export hubs, aiming to significantly boost India's online trade.
With current ecommerce exports at USD 2 billion and a target of USD 350 billion by 2030, these measures are expected to unlock vast growth potential, despite existing challenges such as banking constraints.
This bold step underscores the government's commitment to enhancing India's position in the global e-commerce landscape.
