Income Tax 2025

Appearance

Tax on non resident sportsmen or sports associations. ​

211(1) ​

Where the total income of an assessee,––

  • (a) being a sportsman (including an athlete), who is not a citizen of India and is a non-resident, includes any income received or receivable by way of–– (i) participation in India in any game [other than a game the winnings from which are taxable as specified in section 194(1) (Table: Sl. No. 1)] or sport; or (ii) advertisement; or (iii) contribution of articles relating to any game or sport in India in newspapers, magazines or journals; or
  • (b) being a non-resident sports association or institution, includes any amount guaranteed to be paid or payable to such association or institution in relation to any game, other than a game the winnings from which are taxable as specified in section 194(1) (Table: Sl. No. 1) or sport played in India; or
  • (c) being an entertainer, who is not a citizen of India and is a non-resident, includes any income received or receivable from his performance in India, then, the income-tax payable by the assessee shall be the aggregate of amounts mentioned in column C of the Table below:–– --Table--

211(2) ​

No deduction in respect of any expenditure or allowance shall be allowed under any provision of this Act in computing the income referred to in sub-section (1).

211(3) ​

It shall not be necessary for the assessee to furnish a return of his income under section 263(1), if—

  • (a) his total income during the tax year consisted only of income referred to in sub-section (1); and
  • (b) the tax deductible at source under the provisions of Chapter XIX-B has been deducted from such income.
Explanation

Section Summary: ​

Section 211 of the Income Tax Act, 1961, deals with the taxation of income earned by non-resident sportsmen, sports associations, and entertainers in India. The section specifies the tax treatment for income derived from participation in games or sports, advertisements, contributions to articles, or performances in India. It also outlines the tax rates applicable to such income and provides relief from filing a tax return under certain conditions.

Key Changes: ​

  1. Taxation of Non-Resident Sportsmen and Entertainers: The section explicitly includes income from advertisements and contributions to articles related to games or sports in India as taxable income for non-resident sportsmen and entertainers.
  2. Taxation of Non-Resident Sports Associations: It introduces taxation on guaranteed payments made to non-resident sports associations or institutions for games or sports played in India.
  3. No Deductions Allowed: Sub-section (2) clarifies that no deductions for expenses or allowances are permitted when computing taxable income under this section.
  4. Exemption from Filing Returns: Sub-section (3) provides relief from filing a tax return if the taxpayer's income consists solely of income covered under this section and tax has been deducted at source (TDS).

Practical Implications: ​

  1. For Non-Resident Sportsmen and Entertainers: Income earned from participating in games, sports, advertisements, or performances in India is subject to tax at specified rates. Taxpayers must ensure TDS compliance by the payer.
  2. For Non-Resident Sports Associations: Guaranteed payments received for organizing or participating in games or sports in India are taxable. Associations must ensure proper documentation and TDS compliance.
  3. No Deductions: Taxpayers cannot claim any deductions for expenses incurred in earning this income, which may increase their taxable liability.
  4. Simplified Compliance: If the taxpayer's income is solely from the sources mentioned in this section and TDS has been deducted, they are exempt from filing a tax return, reducing compliance burden.

Critical Concepts: ​

  1. Non-Resident: A person who is not a resident of India for tax purposes. Residency is determined based on the number of days spent in India during the financial year.
  2. Tax Deducted at Source (TDS): The payer is required to deduct tax at the time of payment to the non-resident sportsman, entertainer, or sports association.
  3. Guaranteed Payments: Fixed amounts promised to sports associations or institutions, regardless of the event's outcome.
  4. Interaction with Section 194(1): Income from games or sports where winnings are taxable under Section 194(1) is excluded from the scope of this section.

Compliance Steps: ​

  1. For Payers (e.g., event organizers, advertisers):
    • Deduct TDS at the rates specified in the table under Section 211(1).
    • Issue Form 16A to the non-resident sportsman, entertainer, or sports association.
    • File TDS returns as per the due dates.
  2. For Non-Resident Taxpayers:
    • Ensure TDS has been deducted and Form 16A is received.
    • If income is solely from the sources mentioned in Section 211(1) and TDS has been deducted, no tax return filing is required.
    • Maintain records of income and TDS certificates for audit or verification purposes.

Examples: ​

  1. Scenario 1: A non-resident tennis player participates in a tournament in India and earns ₹50 lakh as prize money and ₹20 lakh from endorsements. The organizer deducts TDS at the rate specified in Section 211(1). The player does not need to file a tax return if this is their only income in India.
  2. Scenario 2: A non-resident sports association receives ₹1 crore as a guaranteed payment for organizing a cricket match in India. The payer deducts TDS, and the association is not required to file a tax return if this is their only income in India.

This section ensures clarity in the taxation of non-resident sportsmen, entertainers, and sports associations while simplifying compliance for eligible taxpayers.