Section 194G TDS on Commission on the sale of lottery tickets


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TDS on Commission on the sale of lottery tickets

As per section 194G: Any person who is responsible for paying, on or after the 1st day of October, 1991 to any person, who is or has been stocking, distributing, purchasing or selling lottery tickets, any income by way of commission, remuneration or prize (by whatever name called) on such tickets in an amount exceeding fifteen thousand rupees shall, at the time of credit of such income to the account of the payee or at the time of payment of such income in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rate of five per cent.

Summary of Section 194G of the Income Tax Act
  • Deductor/ Payer: Any person
  • Deductee/ Payee: Any person (whether Resident or Non-Resident)
  • Nature of Payment: Any income by way of commission, remuneration or prize (by whatever name called) on stocking, distributing, purchasing or selling of lottery tickets.
  • Threshold Limit: Exceeding Rs. 15,000/-
  • Rate of TDS:
    • TDS is required to be deducted @ 5 %
    • If the recipient is a Non-Resident, it will be increased by Surcharge or Health and Education cess.
    • If the recipient does not furnish his PAN to the deductor, tax will be deducted @ 20%.
  • Time of deduction:
    Deductor is required to deduct TDS within earlier of the following dates:

    • At the time of credit of such income to the account of the payee or
    • At the time of payment thereof in cash or by the issue of a cheque or draft or by any other mode
  • No TDS is required to be deducted:
    • If aggregate of the amounts of such income paid during the financial year is Rs. 15,000/- or less.

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