TDS on Commission from Sale of Lottery Tickets
Introduction
Tax must be deducted at source (TDS) at 2% under section 194G on commission or remuneration paid for stocking, distributing, purchasing, or selling lottery tickets if the amount exceeds Rs. 20,000 in a financial year.
Key Provisions
- Deductor:Any person making such commission payments.
- Deductee:Any person engaged in the lottery business.
- Rate of TDS:2% (cess and surcharge applied in case of non-resident), in case of non-furnishing of PAN, tax rate specified under Section 206AA.
- Threshold:Deduction applies only if commission exceeds Rs. 20,000 annually.
- Time of Deduction:At the time of credit or payment, whichever is earlier, including when credited to a suspense account.
Compliance Requirements
- Lower/Nil Deduction Certificate:Deductees can apply for a lower TDS certificate under Section 197, but cannot file a self-declaration under Section 197A.
- Deposit of TDS:Must be deposited using Challan ITNS 281 within 7 days of the end of the month of deduction (by 30th April for March deductions). Government offices depositing TDS without a challan must deposit the TDS on the same day on which the tax was deducted.
- TDS Statement Filing:Quarterly submission in Form 26Q.
- TDS Certificate:Form 16A to be issued within 15 days from the due date of TDS statement filing.
Consequences of Non-Compliance
- Failure to Deduct or Deposit:Liable for interest under Section 201, penalty under Section 271C (equal to the undeducted amount), and possible prosecution under Section 276B.
- Failure to Furnish TDS Statement:Liable for a fee of Rs. 200 per day (limited to TDS amount) under Section 234E and penalties under Sections 271H and 272A.
- Failure to Issue TDS Certificate:Liable for penalty under Section 272A.