TDS on Google & Facebook Ads

The Equalisation Levy is gone — but that's a separate question from TDS

The 6% Equalisation Levy on payments to non-resident digital advertising platforms (introduced in 2016, applicable to specified services including online advertising) has been fully abolished with effect from 1 April 2025. This is a confirmed, settled fact — not a pending or uncertain change. Businesses that were previously deducting the 6% levy on Google Ads, Meta/Facebook Ads, or similar platform payments should have stopped doing so from that date.

However, the Equalisation Levy's abolition doesn't automatically mean these payments are now entirely free of any withholding obligation — it simply removes one specific levy that existed alongside (not instead of) the ordinary income-tax TDS framework. Whether income-tax TDS under Section 393(2) applies is a separate question, answered by the ordinary business-connection and PE analysis.

Why most ad-platform payments still end up NIL for TDS too

Large global platforms like Google and Meta generally structure their Indian advertising sales specifically to avoid creating a permanent establishment or business connection through the advertising transaction itself — the advertiser is typically contracting with a foreign group entity for a self-service ad-buying platform, with no dependent agent or fixed place of business involved in that specific transaction. Under this structure, the payment is business income of the foreign entity, not taxable in India absent a PE, and therefore doesn't attract Section 393(2) TDS either.

This is why, in practice, many businesses ended up with a NIL position both before and after the Equalisation Levy's abolition on the income-tax side — the levy was really the primary tax collected on these specific transactions during its existence, precisely because ordinary TDS often didn't apply to begin with.

When the analysis could differ

If the advertising arrangement involves a managed/sales-support relationship with an Indian entity of the platform (rather than a pure self-service platform transaction with the foreign entity), or if the payment includes a bundled component beyond straightforward ad placement — custom campaign management, dedicated account support with decision-making conducted in India — the business-connection analysis can differ from the standard self-service scenario. Each platform relationship should be assessed on its actual contracting structure, not assumed identical to the general case.

Filing requirements even for a NIL position

Even where no TDS is deducted, Form 15CA is generally still filed to support the outward remittance to the foreign platform entity, typically under the not-chargeable-to-tax category, with the underlying rationale (self-service platform, no Indian PE) documented and kept on file.