As per the Union Budget 2020-21, TDS at the rate of ______ is levied on e-commerce transactions.
- AOption (a)
3%
- BOption (b)
1%
- COption (c)
2.5%
- DOption (d)
0.25%
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Correct answer
1%
Why this answer is correct
The correct answer is 1%.
Key Points
- As per the Union Budget 2020-21, TDS at the rate of 1%is levied on e-commerce transactions.
- The government proposed a new levy of one per cent TDS (tax deducted at source) on e-commerce transactions, a move that could increase the burden on sellers on such platforms.
- The main purpose of Govt. is to increase tax payer’s base and eventually collect taxes which will result in the development of the economy as a whole.
- In Budget 2020, Govt. has taken many steps for widening and deepening the tax base.
- One step is the insertion of section 194-O of Income-tax Act, 1961 requiring e-commerce operators to deduct TDS from payments made to e-Commerce participants.
- The same is applicable from 01/10/2020.
Additional Information
- Budget and Constitutional Provisions
- According to Article 112 of the Indian Constitution, the Union Budget of a year is referred to as the Annual Financial Statement (AFS).
- It is a statement of the estimated receipts and expenditure of the Government in a financial year (which begins on 01 April of the current year and ends on 31 March of the following year). In addition to it, the Budget contains:
- Estimates of revenue and capital receipts,
- Ways and means to raise the revenue,
- Estimates of expenditure,
- Details of the actual receipts and expenditure of the closing financial year and the reasons for any deficit or surplus in that year, and
- The economic and financial policy of the coming year, i.e., taxation proposals, prospects of revenue, spending programme and introduction of new schemes/projects.



































































