Income tax department mops up cool Rs 60 crore from IPL

The Indian Premier League is a money-spinner even for the government. The income-tax department, which collected about Rs 60 crore in 2007-08 from the tourney’s stakeholders, expects to collect between Rs 160 crore and Rs 200 crore in the current fiscal.

The Central Board of Direct Taxes has also set up a committee to ascertain the taxability of the income that the franchisees generate by trading players.

The tax collected during 2007-08 was from five franchisees out of the total eight and three franchisees are yet to make payments to BCCI. Out of these five franchisees, three have made TDS at the rate of 11.33%, while two have paid at the rate of 2.33% and will pay additional tax later.

The internal panel would decide whether such income would be treated as capital gains or business income, CBDT member (revenue) Saroj Bala said. The collection from IPL franchisee is on account of Tax Deducted at Source (TDS). She said the TDS rate applicable in the case of payments made to players, coaches and umpires was 11.33% as per Section 194J of the Income-Tax Act.

 The department would focus on collection through TDS in the current fiscal as there is an immense scope for growth, she said, adding it would help in achieving the revised direct tax collection target of Rs 3,95,000 crore for this fiscal.

Although TDS collections have been growing, she said, deductors were still ignorant about either the provisions or rates applicable. To address this situation, the department had undertaken a major initiative to educate the deductors and was organising workshops for them, she said.

“No punitive action is being taken so far. If training has been given to deductors, the department is only carrying out verification to ensure compliance. If it is found that training has not been given, then the department imparts training,” she said.

She highlighted that some central government departments, state governments and some public sector units were found not deducting tax at source due to ignorance. Citing the example of Rajasthan Vidyut Vitran Nigam, she said a large number of state electricity boards were also not deducting TDS.

The I-T department had collected Rs 51.3 crore from the utility in the last fiscal, besides Rs 299.39 crore collected from 10 cases. Certain airlines have also been found to pass commissions as discounts to their agents to avoid tax deduction. In some cases tax was not deducted on interest payments to non-residents.

 Courtesy :- Economic Times

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