IPL fever drives income tax lever

IPL and taxes seems like an odd combination. However think about it a little. IPL is a business of cricket, isn’t it? So where there is business, there is income and where there is income, there is income tax.

IPL spells ‘money’. The amount of money that churns out during a season is probably enough to feed an entire nation! No doubt then, that the income tax department loves the season since it expects a lot of income tax inflow from these players. Not only players but the entire machinery of BCCI, team owners, organizers, broadcasters, commentators, TV anchors, umpires all end up with heavily filled pockets. Such events give rise to a huge potential tax income for the IT department.

The bouncers and hit wickets, the parties and celebrations, the celebrities and star value all sum up to only one single thing – MONEY. The magic weaver Lalit Modi did some real number crunching a few years back and created the IPL franchise – a great combination of entertainment, game and business. Naturally then this raised alarm bells with the income tax collectors and they started sniffing every opportunity to impose and extract tax liabilities.

The IPL tournament leads to huge tax payments in the form of TDS to the tax department. Let us talk about our warrior on field and off field too – Yuvraj Singh. A whopping 16 crore deal with the Delhi Daredevils, makes him the most priced player with Dinesh Karthik closing second at 10.5 crores. The taxes that they might pay in form of TDS @ 10% will be 1.6 crore for Yuvi and 1.05 crore for Dinesh. These are huge amounts. Moreover certain players who do not have an India PAN card may also end up paying 20% TDS on their earning. This will be the case with most foreign players. However some of these players may get some tax relief if we have a double tax avoidance agreement – DTAA with the countries from where they come. But even then, these players will be shelling out huge amounts in taxes, giving the Income Tax department a big reason to rejoice. Income tax return filing for these players and finding their tax liability is going to be an interesting exercise for tax filers.

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