Ipl taxation

Tax queries 2472 views 4 replies

Vignesh Killur

Articled Assistant

1671 Points Joined January 2011

Hi Everyone!

I have some specific questions regarding tax aspects in relation to IPL.

1. At what rate and under which sections is TDS deducted on payments by IPL Franchises/BCCI to foreign players?

2. Is it necessary for Foreign cricketers to file return of Income in India? (since Income is earned in India as matches are played in India). If no need to file returns then under which section they are exempted?

3. Can the Foreign players claim double taxation relief in their country? If an Indian cricketer plays matches abroad how is that income taxed in India? How to claim double taxation Relief in Indian Income tax Act?

4. Do the foreign players need to apply for PAN in India? How are they assessed to tax?

5. If the double taxation agreement provides for lesser tax deduction and player has not applied for PAN, at what rate is tax deducted?

6. What are the Compliance requirements under the Income tax Act for making payments to foreign residents? What are the forms to be filed by the Franchises/ BCCI?

7. What is the Status of BCCI? Is it a Company or Trust?

Thank you in Advance

VIGGI

Replies (4)

Guest

7- BCCI is a society registered in cayman islands

mannu

1/2 CA

589 Points Joined December 2011

The Board of Control for Cricket in India (BCCI), headquartered at Mumbai, is the national governing body for all cricket in India. It's not the apex governing body in India. The board was formed in December 1928 as BCCI replacedCalcutta Cricket Club. BCCI is a society, registered under the Tamil Nadu Societies Registration Act. It often uses government-owned stadiums across the country at a nominal annual rent. It is a "private club consortium". Basically to become a member of a state-level association, one needs to be introduced by another member and also pay an annual fee. The state-level clubs select their representatives (secretaries) who in turn select the BCCI officials. BCCI are not required to make their balance sheets public. In the past, tax exemptions were granted to BCCI on the grounds as promoting cricket was a charitable activity but for the last three years the IPL has questioned this.^[1]

As a member of the International Cricket Council (ICC), it has the authority to select players, umpires and officials to participate in international events and exercises total control over them. Without its recognition, no competitive cricket involving BCCI-contracted Indian players can be hosted within or outside the country.

Mohana Harish

AUDIT TEAM LEAD - CA FINAL

468 Points Joined February 2009

Answer for Question no 1) TDS should be deducted at the Normal rate as applicable for resident.

Vignesh Killur

Articled Assistant

1671 Points Joined January 2011

"The Board of Control for Cricket in India (BCCI), which is no longer considered a “charitable organisation” for assessing income, owes over Rs.371 crore as tax to the government.

And this figure could be even higher as the Income Tax Department is yet to assess the income of one of world's richest sporting bodies for the last two fiscal.

For assessment year 2009-10, the BCCI's income stood at over Rs.964 crore on which the IT Department demanded a tax of over Rs.413 crore.

Paid only Rs.41.91 crore

But the BCCI paid only Rs.41.91 crore. As a result, the BCCI still owes over Rs.371.67 crore to the government as tax for 2009-10, reveals the information gathered under the Right to Information by activist S.C. Aggarwal.

Notably, the department is still to assess the income and tax status of the BCCI for the past two years (2010-11 and 2011-12).

In the assessment year 2007-08, the BCCI's total income stood at over Rs.274 crore on which it paid income tax worth Rs.118 crore.

But its income surged to Rs.608 crore in 2008-09, while the tax also increased to Rs.257 crore.

Notably, the BCCI used to get income tax exemption as a “charitable organisation” but now the government has withdrawn this exemption and the cricketing body's earnings now come under the head “business income.”

Withdrawn

“The assessee (BCCI) used to claim exemption under Section 11 of the I-T Act 1961, available for charitable organisations. The department has withdrawn registration under Section 12 of the IT Act 1961 and rejected assessee's claim for exemption under Section 11 of the I-T Act 1961.

The department has assessed the BCCI's income under the head ‘Business Income',” the department said in its reply"

Reported by the Hindu - 19th Feb 2012