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K.R. Srivats

New Delhi, Aug. 24 Sportspersons have been unconditionally brought under the ambit of tax deduction at source (TDS) at a higher rate, with the Central Board of Direct Taxes (CBDT) now categorising their services in relation to sports activities as ‘professional services’.

The TDS net under professional services (Section 194J) has also been cast wide to include umpires and referees, coaches and trainers, team physicians and physiotherapists, event managers, commentators, anchors and sports columnists, official sources said.

Hitherto, for TDS purposes, sportspersons were covered under Section 194C, which dealt with payments to contractors and pegged the TDS rate at 1-2 per cent.

Now, CBDT is convinced that sportspersons are to be categorised as professionals and hence a TDS rate of 10.3 per cent valid for professional services would be applicable for them.

The latest move would imply that professional sportspersons have to pay upfront at least 10.3 per cent of their match fees and other contractual receipts like corporate logo endorsement fees as TDS.

This would have huge impact on those associated with cricket, who earn large incomes from this sport, which has a huge fan following here.

Sports bodies like the Board of Control for Cricket in India (BCCI) would have to deduct tax at source at 10.3 per cent for the match fees paid to cricketers.

With increased popularity of new cricket formats like Twenty20, the tax department hopes to get a fair share of the incomes of those associated with such tournaments.

The Finance Ministry has been focusing on boosting tax collections by broadening TDS coverage and improving compliance.

Legal, medical, engineering, accountancy, technical consultancy and interior decoration services have been already categorised as professional services under Section 194J.

More Stories on : Sports | Income Tax

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