CBDT exempts power trading from new TDS and TCS on e-commerce

The Central Board of Direct Taxes of India (CBDT) has exempted power trading transactions through online exchanges like Power Exchange India Ltd (PXIL) from the newly imposed section 194 (O) – TDS on E-Commerce Transactions & section 206C (1H) – TCS on Sale of Goods on E-Commerce platform of Income Tax Act, 1961.

The Finance Act 2020 had imposed a levy of 1% and O.1 % on all e-commerce transactions above Rs 50 lakhs under TDS and TCS respectively with effect from October 1, 2020.

However, it was observed that there were practical difficulties in implementation of these taxes in case of power exchanges, like securities and commodities transactions traded through recognised stock and commodities exchanges or cleared and settled through recognised clearing corporations.

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