Income Tax

Taxation on income of foreign IPL players

CA Adityavikram Banka

Taxation on income of foreign IPL players:

The legal position and the mechanism is explained as below:

1. Section 115BBA of the Income Tax Act provides the answer:
This section provides a special tax rate @ 20% (plus EC and SHEC), Plus Surcharge as applicable on specified income arising to a Non-Resident Sportsman or Entertainer who is also not a citizen of India or a non resident Sports Association, in respect of income arising in India.
However, no deduction for any expenditure incurred and allowance is given to such assessee u/s 115BBA.

2. Specified income includes the following:
Income from participating in any games/ sports/ performance.
Income from advertising
Income from contributing articles in the newspaper.

3. TDS U/S 194E of the Income Tax Act:
For the above cases TDS has to be deducted at 20% plus Surcharge and Education Cess while making payment to the sportspersons.

4. ITR need not be filed:
It shall not be necessary for the assessee to furnish return u/s 139(1) if his income consists of only the above income and the TDS has been deducted u/s 194E.

CA Adityavikram Banka
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