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Section 115bba of Income Tax Act

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June 5, 2021

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6 mins read

Section 115bba of Income Tax Act 1961 – Tax on Non Resident Sportsmen or Sports association

Income of Non resident Sportsmen

Where a non-resident sportsman (including an athlete), who is a foreign citizen derives following income, they shall be taxable at 20%: –

  1. Income from participation in India in any game (other than winnings from crossword puzzles, races including horse races, etc. u/s 115BB) or sport; or
  2. Income from advertisement; or
  3. Income from contribution of articles relating to any game or sport in India in newspapers, magazines or journals.

Income of Non Resident Sports Association or Institute – Section 115BBA of Income Tax Act 1961

Any amount guaranteed to be paid or payable to a non-resident sports association or institutionin relation to any game (other than winning from puzzles etc. under Section 115BB) or sport played in Indiashall be taxable at 20%.

Income of Non Resident Entertainer

Any income received or receivable by non-resident entertainer, who is not a citizen of Indiafrom his performance in India shall be taxable at 20%.

Points to Consider – Section 115BBA of Income Tax Act 1961

No Other Deduction

No deduction in respect of any expenditure or allowance shall be allowed under any provision of this Act in computing the aforesaid income of sports person, association or entertainer.

Exemption from filing of returns of income

Non-resident sportsman or sports association or entertainer is not required to furnish return of income under subsection (1) of section 139, if following conditions are satisfied : –

  1. Total assessable income of such non-resident , which is assessable under this Act consists only of aforesaid income ; and
  2. The requisite TDS has been deducted from such income.

Section 115bba of Income Tax Act – Example 1

During  financial year 2017-18, Chris, a Cricketer and a foreign citizen participated in India in a cricket tournament in India and won prize money of Rs 10 lacs. He also contributed articles on the tournament in a local newspaper for which he was paid Rs.  2 Lac. He was also paid RS 5,00,000 by a Soft Drink company for appearance in a T.V. advertisement. Although his expenses in India were met by the sponsors, he had to incur Rs. 5,00,000 towards his travel costs to India. He was a non-resident for tax purposes in India.What would be his tax liability in India for A.Y. 2018-19? Is he required to file his return of income, assuming TDS on all the income has been deducted by respective payors ?

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Solution –

Three items of receipts in India, i.e., prize money of Rs 10 lakhs,  amount received from newspaper of Rs 2 lakh and  amount received towards TV advertisement of Rs 5 lakhs  are chargeable to tax at 20% under Section 115BBA, on a gross basis and no expenditure is allowable against such receipts.

The tax rate shall be further increased by Education Cess @2% and Secondary and Higher Education Cess @1%. The total tax liability works out to Rs. 3,50,200 being 20.6% of Rs 17 lakhs.

He is not required to file his return of income if –

  1. his total income during the previous year consists only of income referred above; and
  2. the TDS have been deducted from such incomes.

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Arinjay Jain

Bio of author

Arinjay is a Chartered Accountant with more than 20 years of post-qualification experience. He worked as Director, in the M&A Tax Division at KPMG in India. Presently, he is advising several MNCs in UAE on Economic Substance Regulations and impact of the UAE Corporate Tax Law on their business and clients across globe on International Tax issues . He is a well recognised Trainer of International Tax and UAE Corporate Tax. The areas of service include the following : - Advise and Compliance relating to International Tax Issues; Advise relating to UAE Corporate Tax Issues; Advise and Compliance relating to UAE Economic Substance Regulations; Advise and Compliance relating to Indian Income Tax Issues; Other connected matters from a Regulatory perspective.

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