Launch offer — 25% off with code LAUNCH-25 See plans →
Microlesson · 5-min read

Sections 194G & 194H – Lottery Ticket Commission and Commission/Brokerage

# Sections 194G & 194H – Other Commissions

## A. Section 194G – Commission on Sale of Lottery Tickets

ParameterDetails
PayerAny person paying income by way of commission, remuneration or prize on lottery tickets
PayeeAny person stocking, distributing, purchasing or selling lottery tickets
ThresholdAmount > ₹20,000 in a F.Y.
Rate2%
TimeEarlier of credit or payment

## B. Section 194H – Commission or Brokerage

ParameterDetails
PayerAny person, EXCEPT individual/HUF whose total sales/gross receipts/turnover ≤ ₹1 crore (business) or ₹50 lakhs (profession) in immediately preceding F.Y.
PayeeAny Resident
ThresholdAmount > ₹20,000 in a F.Y.
Rate2%
TimeEarlier of credit or payment

### What 'Commission or Brokerage' Includes

  • Any payment received or receivable, directly or indirectly, by a person acting on behalf of another for services rendered (other than professional services) OR for any services in the course of buying or selling of goods, or in relation to any transaction relating to any asset, valuable article or thing.

### Important Exclusions

  • Insurance commission (covered separately u/s 194D).
  • Brokerage/commission paid by BSNL or MTNL to PCO franchisees (specifically excluded).

## Snapshot

```

| 194G | 194H

Nature | Lottery ticket commission| Commission/Brokerage

Threshold | > ₹20,000 | > ₹20,000

Rate | 2% | 2%

Time | Earlier of credit/pmt | Earlier of credit/pmt

```

Worked example

### Example 1

Example 1 – Lottery distributor (194G):

State Lottery pays ₹60,000 commission to a lottery distributor in F.Y.

  • > ₹20,000 → TDS @ 2% = ₹1,200.

### Example 2

Example 2 – Brokerage (194H):

XYZ Ltd. pays ₹35,000 brokerage to Mr. B (resident).

  • > ₹20,000 → TDS @ 2% = ₹700.

### Example 3

Example 3 – Small individual payer:

Mr. P (individual, no tax audit, turnover ₹40 lakh) pays brokerage of ₹50,000 to Mr. Q.

  • Sec 194H does NOT apply – Mr. P is not a 'specified person'.

⚠️ Common exam mistakes

  • Applying 10% rate to brokerage/commission – Sec 194H rate is 2%.
  • Deducting TDS u/s 194H on insurance commission – it falls under 194D.
  • Treating lottery ticket commission (194G) and lottery winnings (194B) the same – distinct sections with different rates (2% vs 30%).
  • Forgetting the small Ind/HUF exemption from being a 'payer' under Sec 194H.
Reference: 194G, 194H
Now that you've read this — what's next?
Move from understanding → mastery in 3 clicks. Each option below picks up from this lesson's topic.
Start 15-min diagnostic