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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What are the important aspects of income tax filing from a salaried tax payers perspective?

If an individual is having taxable income it is always recommended to file his income tax returns. For a salaried individual, following are the key considerations that should be taken into account while filing Income Tax Returns.

1. Form 16: Form 16 is an annual statement of salary on which tax is calculated. Form 16 is given in two parts i.e. PART A and PART B. It is accompanied with Form 12BA which is calculation of taxable and non-taxable perquisites. If TDS is deducted, ensure that PART A of Form 16 is issued by TRACES.

2. Form 26AS: Form 26AS is an annual tax statement developed by Income Tax Department in which credit of TDS deducted for the financial year can be viewed by the employee. It is important to ensure that TDS deducted reflects in Form 26AS and matches the TDS deducted as per Form 16 (Part B). For any mismatch, one needs to contact the payroll department to rectify it.

3. E filing of income tax returns: E-filing is mandatory for an individual having income above Rs. 5 lakhs.

4. Other Income: Please ensure that the income from other sources like interest earned, house rent, capital gain etc. is declared while filing your tax returns.

5. Deductions: There could be certain deductions that are not considered by the employer. At the time of filing the return, one should include such deductions to claim the benefits given by law.

6. Last Date: For salaried employees, last date for filing income tax returns is 31st
7. Income Return Forms: Ensure that you select proper Income Tax Return Forms issued by the Income Tax Department i.e. ITR 1  or ITR 2

Source: http://blog.hrblock.in/