# TDS and TCS on OTA payouts: what really lands in your bank

> Every OTA payout arrives smaller than the booking. This guide explains the commission, the GST on it, the 0.5% GST TCS and the 0.1% income tax TDS, how to claim each back, and how to reconcile a payout line by line.

- URL: https://guesthawk.com/guides/tds-tcs-on-ota-payouts
- Category: Tax
- Tags: OTAs, GST, Channel manager
- Published: 11 November 2026
- Updated: 11 November 2026
- Publisher: GuestHawk (https://guesthawk.com)

Most hotel owners know their OTA commission rate. Fewer can explain why a payout is smaller again than the booking minus commission. The gap is made up of TDS and TCS on OTA payouts (TDS deducted under income tax, TCS collected under GST) and the GST charged on the commission itself. None of it is lost money if you claim it back, but much of it goes unclaimed because nobody matches the payout to the bookings. This guide explains each deduction, the current rates, how to recover them and how to reconcile a payout, with a worked example.

It reflects the rules **as of November 2026**. It is not tax advice, so confirm the details for your property with your chartered accountant.

## The four deductions on an OTA payout

When an OTA collects the money from the guest and pays you later, four amounts usually come off before it reaches your bank:

| Deduction | Under | Rate (November 2026) | Can you recover it? |
| --- | --- | --- | --- |
| Commission | Your OTA contract | Varies by OTA and programme | No, it is the OTA's fee |
| GST on commission | GST | 18% of the commission | As input tax credit, only for rooms that allow credit |
| GST TCS | Section 52, CGST Act | 0.5% of the net taxable value | Yes, through your electronic cash ledger |
| Income tax TDS | Section 393, Income-tax Act 2025 (formerly 194-O) | 0.1% of the gross amount | Yes, against your income tax |

The commission is the only true cost in principle. In practice, for most small properties the GST on commission is a cost too, as the next sections explain.

## OTA commission TDS: section 194-O, now section 393

Since 2020, an e-commerce operator has had to deduct income tax from the amount it pays a seller for goods or services sold through its platform. For hotels, that means the OTA deducts tax from the room value of every booking it facilitates.

- **Rate.** **0.1%** of the gross amount of the sale. It was 1% until the Finance (No. 2) Act, 2024 cut it to 0.1% from 1 October 2024.
- **New section number.** The Income-tax Act, 2025 replaced the 1961 Act from 1 April 2026. Old section 194-O now sits in **section 393(1), Table, Sl. No. 8(v)** of the new Act, at the same 0.1% rate. Your OTA statements and Form 26AS may show either reference depending on the period.
- **Small owners.** No TDS is deducted where the seller is an individual or HUF whose gross sales through that platform in the tax year do not exceed ₹5 lakh and who has given the OTA their PAN or Aadhaar. This matters for homestays run in the owner's own name.
- **No PAN, higher rate.** If the OTA does not have your PAN, the rate rises, up to 5% for this kind of deduction. Make sure every OTA account holds the right PAN.
- **GST in the base.** CBDT guidance under the old section said that where GST is shown separately on the invoice, TDS is on the amount excluding GST. Check with your CA how your OTA applies this under the new Act.

The TDS shows up against your PAN in Form 26AS, and you claim it in your income tax return like any other tax deducted at source.

## TCS on OTA payouts under GST section 52

Section 52 of the CGST Act requires an e-commerce operator to collect tax on the **net value of taxable supplies** made through it, where the operator collects the money. The OTA files these collections in its monthly return, and they appear on your side of the GST portal.

- **Rate.** **0.5%** of the net taxable value since 10 July 2024 (Notification 15/2024-Central Tax). It was 1% before.
- **Split.** For a hotel stay, 0.25% CGST and 0.25% SGST. Section 12(3) of the IGST Act places a stay in the property's state, so the supply is always intra-state.
- **Net value.** TCS is on the taxable value, not the amount including GST, and is reduced for cancellations and refunds in the same month.
- **Pay-at-hotel.** Where the guest pays you directly, the OTA has not collected the money, so GST TCS does not apply to that booking.

## How to claim TCS credit in GSTR-2X

TCS is your money held at the government. You get it back through the GST portal:

1. Log in and go to **Services, Returns, TDS and TCS credit received** (known as GSTR-2X). Choose the year and month.
2. Open the **TCS credit received** tile. Each row is what an OTA reported against your GSTIN for that month.
3. **Accept** rows that match your records and **reject** rows that do not, with a reason. Action is mandatory on every row.
4. Generate the summary and file with DSC or EVC. Since the September 2025 return period, a "Generate summary" step comes before filing.
5. Accepted TCS is credited to your **electronic cash ledger**. Use it to pay GST in your next return, or claim it as a refund if it builds up.

Rejected rows go back to the OTA to correct in a later return. Do not accept a figure you cannot match to bookings, because once filed the choice cannot be undone.

## GST on OTA commission and input tax credit

Every OTA charges 18% GST on its commission and sends you a tax invoice for it. Where an OTA invoices you from outside India, you usually pay the GST on the commission yourself under reverse charge, and it will not appear in GSTR-2B; ask your CA. Whether you can claim that GST back depends on how your rooms are taxed:

- **Rooms above ₹7,500 a night**, taxed at 18% with credit: the GST on commission is input tax credit, used against the GST you owe.
- **Rooms up to ₹7,500 a night**, taxed at 5% without credit since 22 September 2025: the GST on commission cannot be claimed. It is a cost, so your real commission is 18% higher than the contract rate.
- **Properties selling in both bands**: credit on common costs such as commission is apportioned. Your CA will set the method.

The change in force from 1 November 2026 (Notification 06/2026-Central Tax (Rate)) allows a 5% hotel limited credit only on accommodation bought from another hotel, as our guide to [walking a guest when overbooked](https://guesthawk.com/guides/walking-a-guest-when-overbooked) explains. It does not extend to OTA commission. See [GST on hotel rooms and restaurants](https://guesthawk.com/guides/gst-on-hotel-rooms-and-restaurants) for the rate bands.

## Worked example: a ₹1,00,000 stay booked through an OTA

Take a group booking of 20 room-nights at ₹5,000 a night, so the room value is ₹1,00,000. The guest prepays through the OTA. Commission is 18% of the room value before GST, as in many contracts.

| Line | Amount |
| --- | --- |
| Room value | ₹1,00,000 |
| GST at 5% (2.5% CGST + 2.5% SGST) | ₹5,000 |
| Guest pays the OTA | ₹1,05,000 |
| Less commission at 18% | (₹18,000) |
| Less GST on commission at 18% | (₹3,240) |
| Less GST TCS at 0.5% of ₹1,00,000 | (₹500) |
| Less income tax TDS at 0.1% of ₹1,00,000 | (₹100) |
| **Lands in your bank** | **₹83,160** |

What happens next:

- You owe the **₹5,000 GST** on the rooms in your return. The ₹500 TCS in your cash ledger pays part of it.
- You claim the **₹100 TDS** in your income tax return.
- The **₹3,240 GST on commission** cannot be claimed, because these rooms are in the 5% band without credit.

So the booking really costs you ₹18,000 + ₹3,240 = **₹21,240** in commission, or about 21 per cent of the room value, not 18. If the same ₹1,00,000 were 10 nights at ₹10,000, taxed at 18% with credit, the GST on commission would come back as input tax credit and the cost would be the ₹18,000 alone. Our guide to [cutting OTA commission](https://guesthawk.com/guides/cutting-ota-commission) shows how to move repeat guests to direct bookings.

> **Check your contract**
>
> Some OTAs calculate commission on the amount including taxes, or add charges for payment collection or promotions. Use the base and charges in your own contract when you check a payout.

## Reconciling OTA payouts every month

A payout is a sum of many bookings, cancellations and adjustments. Reconcile it once a month, booking by booking:

1. **Download the OTA's settlement statement** for the month, with booking IDs, room value, commission, GST on commission, TCS and TDS.
2. **Match each booking** to your own records: dates, rooms, value and status. Cancellations and no-shows are where most differences hide.
3. **Match the commission invoice** to the statement, and check it appears in your GSTR-2B under your GSTIN.
4. **Match the TCS** in GSTR-2X to the statement total, then accept or reject.
5. **Match the TDS** to Form 26AS each quarter.
6. **Match the bank credit** to the net payout. A difference means a booking, a fee or a deduction you have not explained yet.

### Common reasons a payout does not match

- **Cancellations and modifications.** A booking cancelled after the OTA's cut-off may still carry a fee, and a shortened stay changes the commission and the TCS. The OTA often adjusts it in a later month, not the month of the stay.
- **Timing.** OTAs settle on their own cycle. A stay in the last week of March may be paid in April, so its TCS and TDS can fall in a different month, and even a different financial year, from the stay.
- **Promotions and programme fees.** Visibility programmes, member discounts and payment charges can be deducted as separate lines with their own GST.
- **Pay-at-hotel bookings.** These carry no TCS, but the OTA will invoice its commission separately, and you pay it. Keep these invoices with the month's statement so the commission is not missed.
- **Wrong GSTIN or PAN.** If an OTA holds an old GSTIN or the wrong PAN, the credit lands on someone else's account, or not at all. Check both on every OTA extranet once a year.

> **Below the GST threshold**
>
> If your property is below the registration threshold, the GST position on rooms sold through an OTA is different, and the OTA may account for the tax itself. Settle it with your CA before you list.

This is far easier when every OTA booking is already in one system, with the same booking ID the OTA uses. If you are still adding properties to OTAs, read our guide to [listing your hotel on OTAs](https://guesthawk.com/guides/list-your-hotel-on-otas) first, and the [end-of-day close guide](https://guesthawk.com/guides/night-audit-process) for keeping daily numbers clean.

## Keeping the numbers straight

TDS and TCS are small percentages, but across a year of bookings they add up to real money in your cash ledger and your income tax account, and the GST on commission is a bigger cost than most owners assume. GuestHawk's [channel manager](https://guesthawk.com/platform#channels) keeps OTA rates and availability in step, and revenue syncs with your accounting software, so month-end is quicker. See [finance on GuestHawk](https://guesthawk.com/platform#finance) or our [pricing](https://guesthawk.com/pricing).

## Frequently asked questions

### How much TDS does an OTA deduct from a hotel's payout?

As of November 2026, an e-commerce operator deducts income tax at **0.1%** of the gross amount of the sale. The rate was cut from 1% on 1 October 2024. From 1 April 2026 the provision sits in section 393(1) of the Income-tax Act, 2025 (Table, Sl. No. 8(v)), replacing section 194-O.

### What is the GST TCS rate on OTA bookings?

**0.5%** of the net taxable value collected through the OTA, since 10 July 2024. For a hotel stay that is 0.25% CGST and 0.25% SGST, because a stay is always supplied in the property's state.

### How do I claim the TCS an OTA collected?

On the GST portal, open the TDS and TCS credit received form (GSTR-2X), accept the entries the OTA reported and file it. The accepted amount is credited to your electronic cash ledger, where you can use it to pay GST.

### Can I claim input tax credit on the GST charged on OTA commission?

Only for rooms taxed at 18% with credit. For rooms up to ₹7,500 a night, taxed at 5% without credit, the 18% GST on commission is a cost. If you sell in both bands, your CA apportions it.

### Is TDS deducted on pay-at-hotel bookings?

The income tax rule treats payments a guest makes directly to you for a booking made on the platform as passing through the operator, so TDS can still apply. GST TCS applies only where the OTA collects the money. Check how your OTA recovers it on its statements.

### Is this guide tax advice?

No. It is a general overview as of November 2026. Confirm the treatment for your property with your chartered accountant.

## Sources

- [CBIC: CGST Act 2017, section 52, collection of tax at source](https://taxinformation.cbic.gov.in/content/html/tax_repository/gst/acts/2017_CGST_act/active/chapter10/section52_v1.00.html)
- [CBIC: IGST Act 2017, section 12, place of supply](https://taxinformation.cbic.gov.in/content/html/tax_repository/gst/acts/2017_IGST_Act/active/chapterv/section12_v1.00.html)
- [GST Council: Notification 15/2024-Central Tax, TCS rate cut to 0.5%](https://gstcouncil.gov.in/sites/default/files/2024-09/central-tax-15-2024-11072024.pdf)
- [Income Tax Department: Income-tax Act, 2025, section 393 (TDS)](https://www.incometaxindia.gov.in/documents/20117/42998/Section-393_2026-04-01_05-15-05_249d73_en.pdf/e3e175fc-b0b9-b1b1-b533-083cff93fcbd?version=13.0&t=1775043916602)
- [Income Tax Department: section 194-O, TDS by e-commerce operators](https://www.incometaxindia.gov.in/w/section-194-o-5)
- [Ministry of Finance: memorandum explaining the Finance Bill, 2024](https://www.indiabudget.gov.in/budget2024-25/doc/memo.pdf)
- [PIB, Ministry of Finance: FAQs on the decisions of the 56th GST Council meeting, Sep 2025](https://www.pib.gov.in/PressReleasePage.aspx?PRID=2167151)
- [GST Portal user manual: TDS and TCS credit received (GSTR-2X)](https://tutorial.gst.gov.in/userguide/inputtaxcredit/manual_tds_and_tcs_credit_received.htm)