Any income earned by a person in the form of commission, remuneration, or prize on lottery tickets (deductee) who has been selling lottery tickets (also stocking, distributing, and purchasing) is liable to pay taxes.
1. Time of Deduction – TDS to be deducted at the time of credit or payment, whichever is earlier.
2. Deductor – Any person responsible for paying any income by way of commission, remuneration or prize (by whatever name called) on stocking, distributing, purchasing, or selling lottery tickets shall be responsible to deduct tax at source.
3. Deductee – The recipient can be a resident or non-resident.
4. TDS Deduction Rate: Latest Update – As per the Budget 2024 update, effective from 1st October 2024, the TDS on commissions on the sale of lottery tickets has been reduced from 5% to 2%. The updated TDS rates are as follows:
| Period | TDS Rate |
|---|---|
| Before 01/10/2024 | 5% |
| On or after 01/10/2024 | 2% |
| If PAN is not provided | 20% |
5. Threshold Limit – TDS applies if the income exceeds ₹15,000 in a financial year
6. Cases when TDS shall be deducted at a lower/Nil rate – The assessee case make an application in Form No. 13 to the Assessing Officer and obtain from him such certificate as may be appropriate authorizing the payer to deduct TDS at nil rate or at lower rate.