(A) Provisions regarding Deduction of Tax on Payments made to 'Non-Resident Sportsmen'
Where any person is responsible to pay any income to any non-resident sportsman (including an athlete) who is not a citizen of India, he is required to deduct tax at source @ 20% plus surcharge, as applicable if the payment exceeds Rs.1 Crore + Education Cess @ 2% + SHEC @ 1%.
The income must have been earned by the sportsman by way of:—
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participation in India in any game (excluding any card game and other games of gambling or betting) or sports; or
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advertisement; or
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contribution of articles relating to any game or sport in India in newspapers, magazines or journals.
(B) Provisions regarding Deduction of Tax on Payments made to 'Non-Resident Sports Associations'
Any person responsible to pay any income guaranteed to be paid or payable to a non-resident sports association or institution in relation to any game or sport played in India, shall deduct incometax thereon @ 20% plus Surcharge if applicable + Education Cess @ 2% + SHEC @ 1%.
(C) Provisions regarding Deduction of Tax on Payments made to 'Non-Resident Entertainer'
Where any person is responsible to pay any income to a non-citizen, non-resident entertainer (such as theatre, radio or television artists and musicians) for any performance in India, he is required to deduct tax at source @ 20% (plus surcharge as applicable if the payment exceeds Rs.1 Crore + Education Cess @ 2% + SHEC @ 1%).
(D) When TDS under Section 194E is to be Deducted
Tax should be deducted either at the time of credit of such income to the account of the payee or at the time of its payment thereof in cash or by issue of a cheque or draft or by any other mode, Whichever Occurs Earlier.
Note :
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There is no provision under section 194E for deduction of tax at a rate lower than the rate prescribed above.
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In case of non-resident, the rate of TDS shall include surcharge if applicable + Education Cess + SHEC.
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Obligation to deduction under section 194E is not affected by DTAA
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Section 194E nowhere requires to check whether in the hands of recipient income is chargeable to tax in India. This is the requirement of section 195 and not of section 194E.
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Payments to an umpire/referee do not come within the purview of section 115BBA or 194E. Payment to a resident umpire is covered by section 194J and payment to a non-resident umpire is subject to tax deduction under section 195 if it is taxable in India in the hands of non-resident umpire in India.
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