Taxmen rap BCCI; IPL players see red

Mansi Sharma and Jency Jacob, CNBC-TV18

Foreign players participating in the IPL (Indian Premier League) may soon find a higher amount being deducted in the form of taxes if the Income Tax department has its way. The I-T department has sent a notice to BCCI asking for copies of all agreements signed between the players and the franchisees.

Twenty20 - cricket's latest format is making waves in India throught the Indian Premier League. A huge noisy crowd, film stars rooting for their own teams and cheerleaders are reminders of the league's resounding success. So with everyone sharing the spoils, how can the Income Tax department want to miss the party.

The income tax department has now asked BCCI to furnish details of the tax deductions made while making payments to these players. The income tax department and the BCCI  have had a long history of dispute on taxation issues. And even as BCCI is busy milking the IPL cashcow, the I-T department is determined to extract its pound of flesh with what it feels is a purely commercial business venture and not just cricket.

In its notice served to BCCI, the I-T separtment has asked the BCCI to clarify whether TDS at 11.33% has been deducted before releasing the payment
They have also said that since the contract is a long term contract of three years, why should the applicable tax slabs prevailing in the country not be applied, a demand that is supported by tax experts.

BD Gupta, Former Income Tax Commissioner said, "There is no exemption. Whatever money they make they have to pay 11% TDS and after that they also have to file their income tax returns."

The BCCI is likely to contest this claim on the grounds that the IPL is a short term venture and does not amount to employment.

Meanwhile the service tax department is also investigating whether any of  the contracts signed between BCCI and the various franchisees come under the service tax net or not.