Tax · Free tool
Equalisation Levy
Section 165 (digital ads) — 6% on payments > ₹1L/FY to non-resident foreign companies for online ads. Section 165A (e-commerce) — 2% — abolished from 1 Aug 2024.
₹5,00,000
₹30,000 levy
Rate: 6%
Section 165 — applies to resident payers when buying ads from foreign cos (Google, Meta etc) above ₹1 lakh / FY.
FAQ
Why is the e-commerce levy abolished?
Pillar Two of OECD's global tax reform replaces unilateral digital taxes. India committed to phasing out the 2% levy as Pillar Two implementation progresses. Effective 1 Aug 2024.
Is digital ad levy disallowable as expense?
Yes — section 40(a)(ib): if you don't deduct + deposit the 6% levy, the entire ad expense is disallowed.
Indian-resident-to-Indian-resident ads?
No equalisation levy. Section 165 only applies when payee is non-resident foreign company. Domestic Google India / Meta India ads are normal vendor payments.