Section 194E | TDS on Payments to Non-Resident Sportsmen or Sports Association

CA.R.S.KALRA | Last updated: 20 January 2021

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Section 194E outlines the Tax Deducted at Source (TDS) requirements for payments made to non-resident sportsmen, entertainers, or sports associations in India. The tax is deducted at a rate of 20% at the time of crediting the income or making the payment, whichever occurs first. This applies to income earned from participation in games, advertisements, or performance-related payments within India.

194E. Where any income referred to in section 115BBA is payable to a non-resident sportsman (including an athlete) or an entertainer who is not a citizen of India or a non-resident sports association or institution, the person responsible for making the payment shall, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rate of twenty percent.

1) Who is responsible to deduct tax u/s 194E?

TDS on Payments to Non-Resident Sportsmen: Section 194E

Any person responsible for making following payment shall deduct tax at source:-

Payee	Nature of income
(a) Non – resident foreign citizen sportsman (including an athlete)	Income is by way of- a. participation in India in any game (other than card game or gambling, etc.); or b. advertisement; or c. contribution of articles relating to any game or sport in India in newspapers, magazines or journals
(b) Non-resident sports association or institution	Any amount guaranteed to be paid or payable in relation of any game (other than card game, etc.) or sport played in India.
(c) Non-resident foreign citizen entertainer	Income is from his performance in India.

2) When to Deduct TDS under Section 194E?

Tax is to be deducted at the time of credit of such income to the account of the payee or at the time of payment, whichever is earlier.

For this purpose "payment" can be in cash or by issue of a cheque or draft or by any other mode.

3) Rate of TDS under Section 194E

The rate of tax deduction u/s 194E is 20% (Plus Surcharge and Health & Education Cess @4%

FAQ :

Section 194E deals with the Tax Deducted at Source (TDS) on payments made to non-resident sportsmen, entertainers, or sports associations.

The person responsible for making the payment to the non-resident sportsman, entertainer, or sports association is responsible for deducting the TDS.

The TDS deduction rate under Section 194E is 20%, plus applicable surcharge and Health & Education Cess.

TDS must be deducted at the time of crediting the income to the payee's account or at the time of payment, whichever is earlier.

This section covers income from participation in games in India, advertisements, contributions to sports-related articles, performances in India, or amounts guaranteed in relation to games played in India.