TAX ON NON-RESIDENT SPORTS PERSON OR SPORTS ASSOCIATION


The 51 days long festival of cricket just concluded at the end of June, 2018 which is celebrated across the country and outside. Yes, we are talking about the Indian Premiere League a.k.a. IPL that involved both domestic as well as international sportspersons and sponsors. However, IPL is also referred to as Indian Pocket League as any person doing business with the franchisees come out with pocket full of money. These include foreign cricketers as well as officials involved in the game and their commercial endorsements. And not just cricket, any tournament organized in India involves lots of non-resident sportspersons as well as sports association. But do they just Come-Play-Earn and Go or they also have to shed some money towards taxes? Let’s find out…

Section 115BBAof Income Tax Act, 1961 of deals with the taxability of non-resident sports persons and sports associations. It states that:

  1. Where the total income of an assessee,—

  1. being a sportsman (including an athlete), who is not a citizen of India and is a non-resident, includes any income received or receivable by way of—

    1. participation in India in any game (other than a game the winnings wherefrom are taxable under section 115BB) or sport; or

    2. advertisement; or

    3. contribution of articles relating to any game or sport in India in newspapers, magazines or journals; or

  2. being a non-resident sports association or institution, includes any amount guaranteed to be paid or payable to such association or institution in relation to any game (other than a game the winnings wherefrom are taxable under section 115BB) or sport played in India; or

  3. being an entertainer, who is not a citizen of India and is a non-resident, includes any income received or receivable from his performance in India,

the income-tax payable by the assessee shall be the aggregate of—

    1. the amount of income-tax calculated on income referred to in clause (a) or clause (b) or clause (c) at the rate of twenty per cent; and

    2. the amount of income-tax with which the assessee would have been chargeable had the total income of the assessee been reduced by the amount of income referred to in clause (a) or clause (b) or clause (c) :

Provided that no deduction in respect of any expenditure or allowance shall be allowed under any provision of this Act in computing the income referred to in clause (a) or clause (b) or clause (c).

  1. It shall not be necessary for the assessee to furnish under sub-section (1) of section 139 a return of his income if—

    1. his total income in respect of which he is assessable under this Act during the previous year consisted only of income referred to in clause (a) or clause (b) or clause (c) of sub-section (1); and

    2. the tax deductible at source under the provisions of Chapter XVII-Bhas been deducted from such income.

Further section 194E of the Income Tax Act, 1961, states that

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 per cent.


So, that is how it is. Our Income Tax Law spares no one, not even the sports persons who we all love to watch when they perform!!!