Section 194G of the Income-tax Act mandates that any person responsible for paying commission, remuneration, or prizes related to stocking, distributing, purchasing, or selling lottery tickets must deduct tax at source (TDS) at a rate of 2% if the payment exceeds ₹15,000. The Finance Bill, 2025, proposes to amend this provision by increasing the threshold for TDS deduction to ₹20,000. This change applies to payments made on or after April 1, 2025, and is aimed at updating the tax deduction framework in line with evolving financial dynamics. Clause 57 of the bill outlines this amendment, ensuring that tax obligations for small-scale transactions involving lottery commissions are reduced while maintaining compliance for higher-value payments.
Budget 2025: Section 194G – Commission, etc., on sale of lottery tickets.
Section 194G of the Act requires that any person who is responsible for paying, 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 Rs. 15,000/- shall, deduct income-tax thereon at the rate of two per cent.
2. It is proposed to increase this threshold amount for requirement of deduction of tax at source under this section from Rs. 15,000/- to Rs. 20,000/-.
3. This amendment will take effect from the 1st day of April 2025.
[Clause 57]
Extract of Relevant Clauses of Finance Bill, 2025
Clause 57 of the Bill seeks to amend section 194G of the Income-tax Act relating to commission, etc., on sale of lottery tickets.
Sub-section (1) of the said section, inter alia, provides that 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 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 two per cent.
It is proposed to amend the sub-section (1) of said section so as to provide the threshold of such income for requirement to deduct tax at source under this sub-section is twenty thousand rupees.
This amendment will take effect from 1st April, 2025.
Extract of Relevant Amendment Proposed by Finance Bill, 2025
57. Amendment of section 194G.
In section 194G of the Income-tax Act, in sub-section (1), for the words “fifteen thousand rupees”, the words “twenty thousand rupees” shall be substituted.
