The Central Board of Direct Taxes (CBDT) is examining whether the Board of Control for Cricket in India (BCCI), the organisers of the money-minting Indian Premier League, can qualify as a charitable organisation, which entitles it to a tax holiday on all its earnings.

A special committee has been set up by CBDT to look into the matter, sources told ET. The board has also sought inputs from field officers.

CBDT, which had, through a circular in 1984, classified promotion of sports or games as a charitable purpose, is now examining the circulars validity in the backdrop of IPL and the changes made in the definition of charitable purpose in the Finance Act this year.

BCCI earned about Rs 750 crore in revenues in 2006-07, which was a 50% jump over the previous fiscal. Total revenues from IPL are estimated at Rs 800 crore.

The Finance Act this year made changes in the definition of charitable purpose to ensure that entities operating on commercial lines do not claim income tax exemption. Section 2(15) of the Income Tax Act defines charitable purpose to include relief for poor, education, medical relief and the advancement of any other object of general public utility.

The Supreme Court decision in the case of Gujarat Maritime Board, which said the public utility was eligible to get registered as a charitable institution, is understood to have prompted the move.

It was felt that the ruling had created an anomalous situation as the tax benefit was intended only for institutions that carried out charitable work in the nature of public good and corrective measures were required to prevent it from opening a Pandoras box.