How to Claim Section 194O TDS: for Indian Hotel Owners

In the world of Indian hospitality, seeing a deduction on your MakeMyTrip (MMT) or Booking.com payout is standard practice. However, one specific deduction often leaves hoteliers confused: Section 194O TDS.

If you have been using our Hotel OTA Payout Calculator, you’ve noticed that 0.1% of your Gross Booking Value is withheld as TDS. While it seems like a small amount, over a financial year, this can add up to thousands of rupees in "trapped" cash flow.

What is Section 194O?

Introduced in the Finance Act 2020, Section 194O mandates that E-commerce Operators (OTAs) must deduct TDS at the rate of 0.1% at the time of credit. For you, the hotelier, this means the OTA acts as the deductor, and you are the deductee.

Step 1: Verify the TDS in Form 26AS

Before you can claim the money, you must ensure the OTA has actually deposited it with the government. Log in to the Income Tax e-Filing portal and view your Form 26AS. Verify that the amounts deducted from your monthly vouchers match the amounts reflected under the OTA's TAN.

Step 2: Reconcile with AIS/TIS

Since 2024, the Income Tax Department relies heavily on the Annual Information Statement (AIS). If there is a mismatch between your hotel's internal books and the AIS, your refund might get stuck. Use our calculator's PDF Export feature to maintain a monthly log.

Step 3: Filing the Correct ITR Form

To claim a refund, you must file your Income Tax Return. Ensure that the credits for Section 194O are claimed against your total tax liability in the TDS schedule. If your liability is lower than the TDS collected, the Department will issue a refund directly to your bank account.