Swiggy & Zomato Delivery Partners: Unlock Your TDS Refund! A Complete Guide

Swiggy & Zomato Delivery Partners: Unlock Your TDS Refund! A Complete Guide

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The gig economy has opened up fantastic earning opportunities for countless individuals, with Swiggy and Zomato delivery partners forming a significant part of this workforce. As a delivery partner, your hard-earned income is subject to Tax Deducted at Source (TDS). While this is a standard tax collection mechanism, many partners might be unaware that they could be eligible for a TDS refund. This blog post will guide you through the essentials of TDS refund for Swiggy & Zomato Delivery Patners , eligibility, relevant tax rules, and practical tips to claim your money back.

What is TDS and Why is it Deducted for Delivery Partners?

TDS, or Tax Deducted at Source, is a method where a portion of your income is deducted by the payer (in this case, Swiggy or Zomato) and paid directly to the government on your behalf. This ensures regular tax collection and allows you to pay taxes in installments rather than a lump sum at the end of the year.

For e-commerce participants like Swiggy and Zomato delivery partners, TDS is primarily governed by Section $194\text{O}$ of the Income Tax Act, 1961. Here’s what you need to know:

Applicability: E-commerce operators (Swiggy/Zomato) are required to deduct TDS on the gross amount of sales of goods or provision of services (your delivery services) facilitated through their platform.

TDS Rate: The standard TDS rate under Section $194\text{O}$ is $1\%$ of your gross earnings from the platform.

Exemption Threshold: A crucial point is that if you are an individual or a Hindu Undivided Family (HUF), and your total earnings from a single platform (e.g., from Swiggy alone or Zomato alone) in a financial year do not exceed $₹5\text{ lakh}$, and you have provided your PAN (Permanent Account Number) or Aadhaar to the platform, then no TDS should be deducted by that platform.

Higher TDS without PAN/Aadhaar: If you haven't provided your PAN, or if your PAN is not linked with your Aadhaar, the TDS rate can be significantly higher, potentially $5\%$ under Section $194\text{O}$ or even $20\%$ as per Section $206\text{AA}$.

Are You Eligible for a TDS Refund?

Just because TDS has been deducted doesn't mean it's all tax you owe. You can be eligible for a TDS refund if:

Your Total Taxable Income is Below the Basic Exemption Limit: After accounting for all permissible deductions and expenses, if your net taxable income is less than the basic exemption limit for the financial year, you can claim a full refund of the TDS.

For the Financial Year:

New Tax Regime (Default): The basic exemption limit is $₹3\text{ lakh}$. Due to the tax rebate under Section $87\text{A}$, individuals with a net taxable income up to $₹7\text{ lakh}$ may end up paying no income tax.

Old Tax Regime: The basic exemption limit is $₹2.5\text{ lakh}$ (for individuals below 60 years). With the rebate under Section $87\text{A}$, individuals with a net taxable income up to $₹5\text{ lakh}$ might have zero tax liability.

Your Actual Tax Liability is Lower Than the TDS Deducted: Even if your income is above the exemption limit, your actual tax liability (calculated after claiming eligible business expenses or opting for presumptive taxation) might be less than the total TDS deducted throughout the year. The difference can be claimed as a refund.

Example: Rahul, a Zomato delivery partner, earned $₹4\text{ lakh}$ . Zomato deducted TDS at $1\%$, amounting to $₹4,000$. If Rahul opts for the New Tax Regime and, after considering eligible business expenses, his taxable income is $₹2.8\text{ lakh}$ (which is below the $₹3\text{ lakh}$ basic exemption limit), he can claim a full refund of $₹4,000$.

How to Claim Your TDS Refund: The ITR Filing Process

The only way to claim a TDS refund is by filing your Income Tax Return (ITR). Here’s a breakdown of the process:

ITR Filing is Mandatory for Refunds: Even if your income is below the taxable limit, you must file an ITR to claim any TDS that has been deducted.

Choose the Correct ITR Form:

ITR-4 (Sugam): This form is applicable if you opt for the presumptive taxation scheme under Section $44\text{AD}$ (explained below) and your total income includes business income. This is often suitable for many delivery partners.

ITR-3: If you do not opt for the presumptive scheme and need to declare your income from business/profession by deducting actual expenses, or if your turnover exceeds the limits for the presumptive scheme, you'll need to file ITR-3.

Verify TDS with Form 26AS and Annual Information Statement (AIS):

Form 26AS: This is your tax passbook. It contains details of all TDS deducted and deposited against your PAN. Always cross-check the TDS amounts shown in your Form 26AS with the income details provided by Swiggy/Zomato.

AIS: The AIS provides a more comprehensive view of your financial transactions, including the income you've received and the TDS deducted. You can access both Form 26AS and AIS from the income tax e-filing portal.

Deadline for Filing ITR: For individuals not requiring an audit, the usual due date for filing the ITR is July 31st of the assessment year (e.g., for FY 2023-24, the due date for AY 2024-25 is usually July 31, 2024). Always check the specific deadline for the relevant assessment year.

Understanding Your Income and Expenses (Tax Regulations for Gig Workers)

As a delivery partner, your earnings are generally classified as "Income from Business or Profession." This means you can manage your tax liability by either claiming actual expenses or opting for the simpler presumptive taxation scheme.

Presumptive Taxation Scheme (Section $44\text{AD}$):

This scheme allows eligible small taxpayers to declare their income as a certain percentage of their gross turnover/receipts, without the need to maintain detailed books of accounts.

For delivery partners, if your gross annual earnings (turnover) are within the prescribed limit (currently $₹2\text{ crore}$, or $₹3\text{ crore}$ if $95\%$ of your receipts are through digital modes), you can opt for this scheme.

Under Section $44\text{AD}$, your taxable income can be declared as:

$6\%$ of your gross receipts that were received digitally (e.g., payments credited to your bank account by Swiggy/Zomato).

$8\%$ of gross receipts received in cash (though most platform earnings are digital).

Opting for this can significantly simplify tax calculations and potentially reduce your taxable income.

Claiming Actual Expenses (if not opting for presumptive scheme or if actual profit is lower):

If you don't opt for the presumptive scheme, or if your actual profit after expenses is lower than the presumptive rates (and you are willing to maintain books and get them audited if required), you can claim actual expenses incurred for your delivery work. These can include:

Fuel expenses

Vehicle maintenance and repairs

Vehicle insurance

Mobile phone and data charges (portion used for work)

Depreciation of your vehicle (if owned by you and used for deliveries)

This method requires meticulous record-keeping and supporting documents for all claimed expenses.

Crucial: PAN-Aadhaar Linking It is mandatory to link your PAN with your Aadhaar. Failure to do so can lead to:Your PAN becoming inoperative.

• Higher rates of TDS deduction (as mentioned earlier).


• Inability to file your ITR.


• Non-processing of pending tax refunds.


• A penalty (currently $₹1,000$) to make your PAN operative again.

Practical Tips for a Smooth TDS Refund Process

Keep PAN & Aadhaar Linked and Updated: Ensure they are linked and your details on the income tax portal are current.

Regularly Check Form 26AS/AIS: Before filing your ITR, verify that the TDS deducted by Swiggy/Zomato is correctly reflected.

Pre-validate Your Bank Account: Ensure the bank account where you want to receive your refund is pre-validated on the income tax portal. This enables direct and faster credit of refunds.

File ITR on Time: Even if no tax is payable, file your ITR before the due date to claim your refund.

Maintain Records:

Keep a record of all your earnings statements from Swiggy/Zomato.

If you plan to claim actual expenses, maintain proper bills and receipts for fuel, maintenance, etc.

Utilize Platform Support (if available): Some platforms, like Zomato, have reportedly initiated programs to help their delivery partners with ITR filing. Check if such assistance is available to you.

Take Control of Your Tax Refunds with Easy Return!

Navigating tax laws and the ITR filing process can seem daunting, especially when you're busy on the go. That's where Easy Return comes in. Our team of financial experts specializes in helping gig economy workers, including Swiggy and Zomato delivery partners, with all their tax-related queries. From understanding your TDS deductions and eligibility for refunds to accurately filing your ITR and ensuring a smooth refund process, Easy Return is here to make your financial journey simpler. Don't let your hard-earned money remain unclaimed.

Contact Easy Return today to maximize your refund and stay tax compliant with ease!

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