Tehelka SIT investigative report reveals how cricket legend Tendulkar played ‘actor’ to wangle a substantial tax relief; and how Indian cricketers have an uncanny knack of getting on the wrong side of the tax law
It all started in 2011, when the ‘Master Blaster’ locked horns with the then Assistant Commissioner of the Income Tax Appellate Tribunal. When details of the case entered the public domain, people were left wondering whether Sachin Tendulkar was only a cricketer or an actor as well? The controversy had erupted after Sachin Tendulkar claimed a tax deduction on Rs 5.92 crores he had received in convertible foreign exchange from different companies. The deduction was claimed under Section 80RR of the Income Tax Act, 1961. Section 80RR provides that if a person is a select professional, i.e an author, playwright, artist, musician, actor, or a sportsman, and he receives income from foreign sources, then authorities won’t tax the entire money he earned while exercising his profession.
However the assessing officer rejected Tendulkar’s claim. The grounds for rejection were that Sachin was a professional cricketer. Next, he did not draw income from modelling and advertising from the exercise of his profession. By merely endorsing any product in advertisement, Sachin could not claim to be an actor, the assessing officer reasoned. Tendulkar however appealed against this order in the Income Tax Appellate Tribunal.
His counsel submitted that Tendulkar had drawn income from salary, income from other sources as a cricketer and income from modelling/sponsorships shown as “Income from business/profession”. He submitted that Sachin was not a professional cricketer. And his only profession was that of an actor. Moreover, under section 80RR, a person can have more than one profession. In their final decision, ITAT agreed to the Master Blaster’s appeal and allowed him to avail deductions without issues. Further, ITAT found Sachin Tendulkar’s argument correct as it reiterated that he can be an artist as well as a cricketer. Moreover, when the little master, as he is fondly called, comes on the screen, he does not use his cricketing skills, but only his acting skills. And as the occupation of endorsing brands or products requires skills that are not cricket-related, the deductions are fair, the ITAT ruled.
Tendulkar was levied an income tax of Rs 2,08,59,707 on the income of Rs 5,92,31,211 that he earned from ESPN-Star Sports, PepsiCo and Visa in foreign currency during 2001-02 and 2004-05. With the Tribunal ruling going in his favour, Sachin saved around Rs 2 crore on income made through TV commercials.
