1) Who is responsible to deduct tax u/s 194E?

Any person responsible for making following payment shall deduct tax at source:-

Payee Nature of income
(a) Non – resident foreign citizen sportsman (including an athlete) Income is by way of-

a. participation in India in any game (other than card game or gambling, etc.); or

b. advertisement; or

c. contribution of articles relating to any game or sport in India in newspapers, magazines or journals

(b) Non – resident sports association or institution Any amount guaranteed to be paid or payable in relation of any game (other than card game, etc.) or sport played in India.
(c) Non- resident foreign citizen entertainer Income is from his performance in India.

TDS on Payments to Non-Resident Sportsmen or Sports Association

2) When to Deduct TDS under Section 194E?

Tax is to be deducted at the time of credit of such income to the account of the payee or at the time of payment, whichever is earlier.

For this purpose, “payment” can be in cash or by issue of a cheque or draft or by any other mode.

3) Rate of TDS under Section 194E

The rate of tax deduction u/s 194E is 20% (Plus Surcharge and Health & Education Cess @ 4%

Extract of Section 194E of Income Tax Act, 1961

194E. Where any income referred to in section 115BBA is payable to a non-resident sportsman (including an athlete) or an entertainer who is not a citizen of India or a non-resident sports association or institution, the person responsible for making the payment shall, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rate of twenty per cent.

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