Need Tally
for Clients?

Contact Us! Here

  Tally Auditor

License (Renewal)
  Tally Gold

License Renewal

  Tally Silver

License Renewal
  Tally Silver

New Licence
  Tally Gold

New Licence
 
Open DEMAT Account with in 24 Hrs and start investing now!
« Top Headlines »
Open DEMAT Account in 24 hrs
 How To File ITR Online - Step by Step Guide to Efile Income Tax Return, FY 2023-24 (AY 2024-25)
 Old or new tax regime for TDS on salary? This post-election 2024 event will impact your tax planning
 What Are 5 Heads Of Income Tax?
 Income Tax Dept releases interim action plan for FY25 on tax collection, refund approvals
  Income Tax Return: 5 lesser-known tax-saving tips from Section 80
 Income Tax Return: 5 lesser-known tax-saving tips from Section 80
 Why you need not rush to file your ITR immediately
 Income tax returns: ITR-1, ITR-2, ITR-4 forms for FY 2023-24 available for e-filing
 Section 80DDB tax benefits for specified illnesses: 5 things to know
 Income tax slabs FY 2024-25: Five tips to help taxpayers decide between old and new income tax regimes
 ITR-1, ITR-2, ITR-4 forms for FY 2023-24 (AY 2024-25) available now on e-filing income tax portal

Sachin's endorsement fee not tax deductible: CAG
May, 15th 2007
He owes nearly Rs 4 crore in back taxes

Chennai May 14 The Comptroller and Auditor-General of India has said that Sachin Tendulkar had been given inappropriate tax deductions, as a result of which he owes nearly Rs 4 crore in back taxes.

The findings emerge from a recent performance audit report of the CAG, reviewing the tax assessment of sports associations and sports personalities. CAG said that irregular deductions were allowed to sports persons in respect of foreign income in 7 cases in Chandigarh, Maharashtra and Tamil Nadu.

The tax provision under the audit's focus was Section 80RR of the Income-Tax Act, 1961, which allowed deduction on income derived in the exercise of one's profession from the Government of foreign State, in the case of author, playwright, artist, musician, actor or sportsman (including an athlete).

The deduction was as high as 60 per cent of income brought into India, in assessment year (AY) 2001-02. The sop dwindled steadily to 15 per cent by 2004-05, and became zilch thereafter. One of the conditions for the deduction was that the assessee furnished a certificate along with the return of income, stating that the deduction was being correctly claimed in accordance with Section 80RR.

Audit scrutiny has revealed that the deduction was allowed in respect of income which had not been earned in the capacity of sportsman, and that certificate in the prescribed form (No.10H) had not been submitted, involving a tax effect of Rs. 4.51 crore In the case of Tendulkar, CAG has found that an aggregate irregular deduction of nearly Rs 9 crore had been allowed under Section 80RR on foreign remittances amounting to more than Rs 16 crore. These have been on account of sport endorsement (i.e. advertisements and publicity activities), between AY 1998-99 and AY 2004-2005. Short levy of tax adds to Rs 3.62 crore.

"As the income was not derived from the profession of sportsman, allowance of deduction was not in order," says the CAG report. It appears that the tax department came to the defence of the cricketing icon by saying that he had earned the endorsement money `in the capacity of artist', a permitted category in Section 80RR.

However, the CAG has not accepted the argument, saying that Tendulkar had received the income `in the capacity of a model which cannot be construed as an artist for purpose of this section'. In the face of audit objection, the Mumbai tax department has reopened the champion batsman's earlier assessments; the taxman has also stated that the audit observations would be kept in mind while finalising his income-tax assessments.

D. Murali

Home | About Us | Terms and Conditions | Contact Us
Copyright 2024 CAinINDIA All Right Reserved.
Designed and Developed by Ritz Consulting