TDS on Commission, etc. on Sale of Lottery Tickets (Section 194G)

1. Who is liable to Deduct TDS under Section 194G

2. When TDS under Section 194G is to be Deducted

3. TDS Rate under Section 194G for the Financial Year 2018-19 and 2019-20

4. Where no Tax is to be Deducted or Tax is to be Deducted at a Lower Rate [Section 197 and Rule 28]:

1. Who is liable to Deduct TDS under Section 194G

Where any income by way of commission, remuneration or prize (by whatever name called) on lottery tickets is paid to a person who has been stocking, distributing, purchasing or selling lottery tickets, then the person responsible for paying such income, exceeding Rs.15,000 (Rs.1,000 upto 31.5.2016) shall deduct income-tax thereon under Section 194G.

Where the payer is company, the company itself including the principal officer shall be the person responsible for paying such income.

2. When TDS under Section 194G is to be Deducted

Tax is to be deducted either at the time of its credit to the account of the payee (by whatever name called) or at the time of payment of such income in cash or by issue of a cheque or draft or by any other mode, whichever is earlier.

For the purposes of this section, where any income is credited to any account, whether called "Suspense Account" or by any other name, in the books of account of the person liable to pay such income, such crediting shall be deemed to be credit of such income to the account of the payee and the provisions of this section shall apply accordingly. [Explanation to section 194G]

3. TDS Rate under Section 194G for the Financial Year 2018-19 and 2019-20

Tax is to be Deducted @5%

Note :

1. No surcharge, education cess or SHEC shall be added to the above rates. Hence, tax will be deducted at source at the basic rate.

2. The rate of TDS will be 20% in all cases, if PAN is not quoted by the deductee.

4. Where TDS under Section 194G is either Not to be Deducted or to be Deducted at Lower Rate [Section 197]:

The assessee case make an application in Form No. 13 to the Assessing Officer and obtain from him such certificate as may be appropriate authorising the payer to deduct tax at nil rate or at lower rate.

As per section 206AA(4), no certificate under section 197 for deduction of tax at Nil rate or lower rate shall be granted unless the application made under that section contains the Permanent Account Number (PAN) of the applicant.