Mumbai: Twenty20, cricket's latest format is making waves in India through the Indian Premier League. A huge noisy crowd, film stars rooting for their own teams and cheerleaders are reminders of the league's resounding success.
So with everyone sharing the spoils, how can one expect the Income Tax department to miss the party?
The first target in their sight are the foreign players. The I-T Department has now asked BCCI to furnish details of the tax deductions made while making payments to these players.
The I-T Department and the BCCI have a long history of dispute on taxation issues. And even as BCCI is busy milking the IPL cashcow, the I-T Department is determined to extract its pound of flesh with what it feels is a purely commercial business venture and not just cricket.
In its notice served to BCCI, the I-T Department has asked BCCI to clarify whether TDS at 11.33 per cent has been deducted before releasing the payment. They have also said that since the contract is a long term contract of three years, why should the applicable tax slabs prevailing in the country not be applied?
This demand is supported by tax experts.
Former Income Tax Commissioner, B D Gupta says, "There is no exemption. Whatever money they make, they have to pay 11 per cent TDS and after that, they also have to file their income tax returns."
The BCCI is likely to contest this claim on the grounds that the IPL is a short-term venture and does not amount to employment.
Meanwhile the Service Tax Department is also investigating whether any of the contracts signed between BCCI and the various franchisees come under the service tax net or not.
(With inputs from Mansi Sharma in New Delhi)
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