The Indian Premier League (IPL) is likely to contribute Rs 160-200 crore to government coffers in 2008-09 by way of tax deducted at source (TDS), a hefty increase over Rs 60 crore in 2007-08.

“TDS from IPL stakeholders stood at Rs 60 crore in 2007-08 and this amount does not include three IPL franchisees, who had not deposited tax by March 31,” said Saroj Bala, member (revenue), Central Board of Direct Taxes. Given that the tourney may now be held twice a year, collections would only go up.Payments made to cricketers playing in the tournament will attract a higher rate of TDS at 11.33 per cent, on a par with professionals like engineers and doctors, as against the current rate of 2.33 per cent. A proposal in this regard is awaiting final approval at the Finance Ministry. In fact, all sportspersons are likely to be included in the professionals category for tax purposes.Bala added TDS collections may grow 55 per cent in 2008-09, up from about 51 per cent in 2007-08.On the issue of whether transfer or sale of one player from one frachisee to another will be treated as a capital gain or profit, Bala said the matter will be decided once a committee appointed for the purpose submits its report in a few days.

The taxability of the Board of Control for Cricket in India, the organiser of the IPL, is under examination by the department.It is expected that the income tax exemption available to BCCI may be withdrawn, following a recent amendment to the Income Tax Act to exclude commercial entities from the definition of charity.

Source: business-standard.com