HYDERABAD: There is welcome news for sportspersons complaining of huge tax deductions in cash incentives doled out by the State government for their outstanding performances at highest levels. Interestingly, the list of beneficiaries included the likes of Sania Mirza, Koneru Humpy and Gagan Narang.
For, Sports Authority of Andhra Pradesh has successfully won an appeal against payment of Rs. 272.82 lakh as demanded by the Income Tax for non-deduction as tax at source in respect of payments made to sportspersons during the financial years 2001-2006. Now, the latest orders will benefit sportspersons who can claim exemption of cash incentives and awards under the I-T Act. “SAAP implements promotional policies of the State government and accordingly pays various amounts to sportspersons as cash incentive to help them improve their skills and take part in international meets and in Asian Games, Commonwealth Games and the Olympics,” a senior official said here on Thursday.
“The I-T Department took the stand, based on the objections raised by C&AG that SAAP should have deducted at source U/S 194 B of the I-T Act as winnings from games and accordingly a demand of Rs. 272.82 lakh along with interest for non-deduction of tax,” he explained. The SAAP then contended before the IT Department that the payments to the sportspersons are not covered under Section 194 B as they are not in the nature of winnings but were cash incentives .
Mercifully, SAAP’s contentions are now upheld by the Commissioner of Income Tax (Appeals –II) and the appeals filed by the former were allowed.