Selling a template, an e-book or a paid session from India is easier than it was five years ago. UPI made paying instant for buyers, and payment gateways onboard individuals in a day. The confusing parts are tax and money flow: when do you need GST, who deducts what, and why your payout is less than the sale. This guide explains the moving parts as I understand them from building featurd's billing. It isn't tax advice: rules change, and your situation may differ, so confirm with a chartered accountant before you rely on it.
The three ways to get paid
There are broadly three setups, and they decide who handles tax and payouts:
- Your own payment gateway (Razorpay, Cashfree, PayU and similar). You're the seller of record. You get the full sale minus the gateway's fee, and you handle invoices and GST yourself.
- A creator platform that sells on your behalf (Topmate, Gumroad and similar). Easier to start. The platform takes a commission, may collect tax at source, and pays you out on its schedule.
- A merchant of record, a company that legally sells your product to the buyer and remits tax in each country. This is what makes selling to international buyers manageable, at a higher fee.
UPI: what it costs and what to watch
For buyers in India, UPI is the default. For most person-to-merchant UPI payments from a bank account, the merchant discount rate has been zero by government policy, which is why gateways often advertise free or near-free UPI. Payments through prepaid wallets on UPI and card payments still carry fees, typically around 2% on cards through standard gateway plans. These rules have been revised over time, so check your gateway's current rate card rather than a blog post, including this one.
UPI isn't great for subscriptions. UPI AutoPay mandates exist, but many buyers decline them, so expect more failed renewals than with cards. For a one-off e-book this doesn't matter; for a membership it does.
When GST applies
Digital products and online sessions are generally treated as services under GST. You must register once your aggregate turnover crosses the threshold for services, ₹20 lakh in most states (₹10 lakh in special category states). Below that, registration is optional for most sellers, but read the next paragraph.
Selling through an e-commerce operator (a platform that collects payment for you) can change things: such platforms may need to collect tax at source, and the registration rules for their sellers differ by case. If a platform asks for your GSTIN, ask them, and your CA, whether you're required to register at your turnover.
Once registered, digital services sold to Indian buyers usually carry 18% GST. Sales to buyers outside India can qualify as export of services, which is zero-rated: you charge no GST if you've filed a Letter of Undertaking (LUT) and the money arrives in foreign currency. Keep the bank or gateway's foreign inward remittance proof for each payment.
Income tax and TDS
Income from digital products is business or professional income, taxed at your slab rate. Many individual creators can use presumptive taxation (section 44ADA for specified professions, or 44AD for business income) to simplify books, if their receipts are under the limits. A CA can tell you which fits.
If you sell through an e-commerce operator, it may deduct TDS on your gross sales under section 194-O and deposit it against your PAN. You see it in your Form 26AS and claim it when you file. This is the most common reason a payout looks smaller than expected.
How payouts reach your bank
Gateways settle to your bank account on a rolling basis, often two working days after the payment (T+2), minus fees and any GST on those fees. Instant settlement is usually available at an extra charge. Platforms that sell on your behalf usually pay out weekly or when your balance passes a minimum, and may hold funds longer for new accounts to cover refunds.
For international sales, money goes through a cross-border processor and is converted to rupees. You'll see a currency conversion margin on top of the fee. That's normal; compare the all-in percentage, not the headline fee.
A sensible starting setup
If you're just starting and selling mainly to Indian buyers:
- Start with free products to learn what people want. They cost nothing to run and build your list.
- For your first paid product, use a platform or link-in-bio tool that handles checkout, so you test demand before paperwork.
- Track every sale in a spreadsheet from day one: date, buyer country, amount, fees, payout. It makes GST and ITR filing straightforward.
- When sales become steady or approach the GST threshold, talk to a CA, then decide whether your own gateway with GST registration is cheaper than a platform's commission.
Where featurd fits
On featurd you can list e-books, templates, guides, sessions and free downloads on your page today. Pro plans pay 0% to featurd on sales, and featurd's own subscriptions are sold through a merchant of record, so prices include GST. To sell paid products on Pro, connect your own Razorpay account (for buyers in India) or Stripe (worldwide), so payouts go straight to you, or add a checkout link from another tool you already use. See pricing for what each plan includes.