New Delhi: The big bucks involved in IPL could now spell trouble for the BCCI. The income tax department has sent a notice to BCCI asking for copies of agreements signed between the IPL franchisees and the foreign players.
The I-T department is investigating whether tax was deducted at source at the rate of 11.3 per cent when payment was made to the foreign players.
IPL is of a continuous nature and not a short-term contract and that the income is being generated on Indian soil, foreign players will have to file returns and pay income tax according to the applicable tax slab.
WHERE IS THE MONEY: The I-T department wants to know whether TDS was deducted while making payments to foreign players.
Meanwhile, the BCCI is expected to oppose this move on grounds that IPL is a short-term assignment and will only attract TDS deductions. BCCI has said that they have replied to the income tax department's notice.
Talking about the tax return tax expert Subhash Lakhotia said, “The foreign players are bound to pay tax since they are playing in India. Tax deduction as sources is mandatory for them. ”
Under the franchise model, a sponsor owning a team pays a stipulated fee to the BCCI to get ownership.
The franchisees have to pay 10 per cent of the bid amount every year to BCCI, as a franchisee fee. With the auction fetching BCCI $723.59 million, BCCI will get $72.36 million each year.