BackGovt to generate ₹ 300 cr in taxes from IPL4
Govt to generate ₹ 300 cr in taxes from IPL4
Premium
New Delhi: Government is expected to collect more than ₹ 300 crore in taxes from the fourth edition of the Indian Premier League T20 cricket tournament which will begin in April 2011.
According to sources, the taxes would be obtained as tax deducted at source (TDS) from the remuneration paid to players, umpires, coaches, commentators among others under the income tax (IT) category while advertising, marketing and consultancy services will be taxed under the service tax bracket.
As per an estimate calculated by the revenue department, the IPL will fetch about ₹ 150 crore each under the direct (income tax) and indirect (service tax) categories.
The T20 tournament is being played from 8 April to 22 May in various Indian cities with foreign and domestic players being paid large amounts of money. Almost 60 matches would be played in the fourth edition of the tournament.
The latest edition is coming at a time when the earlier versions of the T20 tournament are being probed by agencies like IT department and enforcement directorate for “taxation aspects of transactions relating to the IPL" including the flow of money from offshore destinations into the tournament.
The government had received ₹ 91 crore as taxes under the TDS category from the IPL’s first edition, while the second edition which was hosted in South Africa had fetched the department “few crores" as income tax.
The third edition brought about ₹ 400 crore under TDS category for the government.
The revenue department expects a rise in taxes this year following a last year IT department order which had termed the BCCI a commercial organisation and not a charitable one and also a notification in 2008 had brought sports-persons under the professionals category.
The Board of Control for Cricket in India (BCCI) has filed an appeal against the IT order.
Under the service tax category, advertising, marketing and consultancy services are taxed, the official said.
The Central Board of Direct Taxes notification in 2008 had expanded the scope of ‘professionals´ under the Income Tax Act, 1961 which included sports-persons, umpires, referees, coaches, trainers, team physicians and physiotherapists, event managers, commentators, anchors and sports columnists.
The notification categorised their services as ‘professional services.´ Such services are taxed in accordance with Section 194J of the IT Act.
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!
