Revised Form 52A notified; producers of OTT content, sports events must furnish details of payment

With Over the Top (OTT) shows and sports programmes gathering pace, the Income Tax Department looks to ensure that payments by producers are properly accounted for and that taxes are duly paid. It has notified a new form where producers of web series, , those engaged in producing sports events or in production of performing arts events must give details about payment of ₹50,000 or more made to anyone engaged in the production.

Earlier, this provision was applicable only to film producers. In this year’s Budget, this provision was rechristened ‘Submission of statements by producers of cinematograph films or persons engaged in specified activity.’ Here, ‘specified activity’ means any event management, documentary production, production of programmes for telecasting on television or over the top platforms or any other similar platforms, sports event management, other performing arts. There is also a provision for expanding the list.

The provision makes it clear that any person carrying on the production of a cinematograph film or engaged in any specified activity, or both, must furnish a statement containing particulars of all payments of over ₹50,000 in the aggregate made by him or due from him to each such person as is engaged by him in such production or specified activity.

Revised Form 52A

To implement this, a revised Form 52A has been notified. According to this, the producer will have to provide details about payment made in cash or through any mode, PAN/Aadhaar details of the recipient, name of the work for which payment is being made and also whether TDS (Tax Deducted at Source) has been applied.

The producer will have to mention the number of cinematograph films/specified activity undertaken during the previous year. In case of a film, he/she will have to mention the name, while in case of specified activity, details about its nature has to be given. Then details for each film or specified activity along with date of starting of production and date of completion will be required to be given.

The form needs to be filed within two months from the end of the previous year.

OTT, other specified activity

A report by SBI Economic Research Division shows, OTT sector accounts for s around 7-9 per cent of the entertainment industry, and is constantly growing with over 40 odd platforms and offering original media content in all languages. As per reports, there are 45 crore OTT subscribers in India and are expected to cross 50 crore by end 2023. This strong growth is led by affordable high-speed mobile internet, doubling of internet users, increased adoption of digital payments and discounted price offered by global players such as Netflix, Prime Video, Disney+Hotstar offering plans in India that are 70-90 per cent cheaper than the US.

Major studios have realised creating streaming series and movies is far more profitable than traditional filmmaking, especially if they build their own streaming platforms.

In India, the OTT market is expected to growth to a ₹12,000-crore industry by 2023, from ₹2,590 crore in 2018, according to independent estimates.  Among other specified activity, sports broadcast production has expanded from cricket and football to badminton, kabbadi and kho-kho, besides others.

COMMENT NOW