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Deduct and Pay TDS on Flipkart LDC Rates – FY 2021-22

Important information for Flipkart sellers - Deduct and Pay Less for the financial year 2021-22.

Are you selling on Flipkart? If yes, then here is some important information regarding deduction of TDS on Flipkart Commission Invoices at LDC (Lower Deduction Certificate) Rates for the financial year 2021-22.

During last previous year, considering the pandemic situation our Finance Minister has given relief on TDS rates i.e., a reduction of 25% on the basic TDS rates.


Lower Deduction Certificate (LDC) of Limeroad FY 2021-22

Know more: Relief on TDS Rates not applicable for FY 2021-22, pay TDS on these rates

From 1st April 2021 onwards, deductors were supposed to deduct and pay to the central government TDS on the rates that were applicable before considering such relief i.e., the rates applicable as of 13th May 2020.

Note:

The TDS for the previous financial year can be reimbursed by Flipkart only if the sellers have made the claim on or before the 30th of September of the following year.

But for the Flipkart sellers, the rates for deduction of TDS are different from such scenario. Flipkart has obtained the Lower Deduction Certificate (LDC) for the financial year 2021-22.

This means the online sellers have to deduct the TDS on the rates mentioned under such Lower Deduction Certificate (LDC). They are not supposed to refer to the original/ reinstated TDS rates as per the Income Tax Act.

If they are selling on other e-commerce portals also, they will continue to deduct and pay TDS on the rates applicable and prescribed under Income Tax Act for the relevant assessment year.

This Lower Deduction Certificate (LDC) is applicable from 22nd April 2021 to 31st March 2022.

If your TAN is not mentioned under the said LDC, then you will not be able to download the LDC from the TRACES website. So, make sure, if LDC contains your TAN then only you will have to deduct the Tax at Source at such lower rates otherwise the existing rates will be applicable.

Flipkart has clearly stated that, if any excess TDS is deducted and paid under their PAN, the same will not be reimbursed to the Deductor.

SectionNature of PaymentTDS %
194CPayments to contractors0.01
194HCommission/ Brokerage0.02
194I(b)Rent – Land and building/ Furniture/ Fittings0.03
194JAFee for Technical services and others0.02
194MPayments of certain sums by certain individuals or HUF0.02

How to download Lower Deduction Certificate (LDC)

Related: Flipkart sellers can file their GSTR-3B with these few steps

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