It’s not just cricketers who made a fortune at last week’s Indian Premier League (IPL) auction. The income tax (I-T) department is set to get richer too, with franchisees owners who splurged record sums of money on cricketers last weekend, having to fork out at least 10% (TDS) to the IT department.
The cash-rich cricketers also may not be able to escape depending on the provisions of the tax treaty India has with their country. The Central Board of Direct Taxes (CBDT) had brought sportspersons under category of professionals as a result of which the TDS rate applicable is 10%. Earlier, the TDS rate applicable on sportspersons was 1-2 %.
In the IPL’s inaugural season last year, the IT department collected close to Rs 60 crore from all stakeholders. The CBDT had also set up a special committee to examine the taxation under IPL. The TDS rate applicable in case of payments made to players, coaches and umpires is 11.33% (including surcharge and cess) as per the section 194J of the Income Tax Act.
