IPL gives I-T Dept Rs 60cr reason to cheer

By Shishir Sinha and Sandeep Gurumurthi, CNBC-TV18

The Indian Premier League has given the I-T Department reason to cheer. Five of the eight franchisees have already made a TDS payout of a cool Rs 60 crore, which is a figure the Department hopes will triple in the coming fiscal.

It is not just Lalit Modi who is laughing his way to the bank. Even their Department has managed to extract its pound of flesh from cricket's hottest new avtaar: the IPL. 

CNBC-TV18 learns that as many as 5 of the 8 franchisees have made a TDS payout of Rs 60 crore.

Three of them have deducted TDS at 11.33% on the payments made to their players and two teams have deducted TDS at 2.33%. The I-T Department has clarified that TDS will be deducted at 11.33%. So, it expects to net a cool Rs 80 crore once the other franchisees pay up and those who have underpaid clear their balance.

The projections for the current fiscal are even more bullish. The I-T Department hopes to mop up upto Rs 200 crore from the second edition of the IPL.

But the controversy over tax treatment of player transfers has still not been resolved. The I-T Department is still grappling over whether to treat players as stock in trade or as assets. If they are to be treated as stock in trade, then a sale will be treated as income and the seller will be taxed accordingly. But if players are to be treated as assets then a sale will only entail capital gains tax. CNBC-TV18 learns that the I-T Departments has set up a Committee to look into the issue.