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Section 194E of Income-Tax Act, 1961

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Section 194E of Income-Tax Act, 1961 deals with Payments to non-resident sportsmen or sports associations.

From the Act

Where any income referred to in section 115BBA is payable to a non-resident sportsman (including an athlete) [or an entertainer,] who is not a citizen of India or a non-resident sports association or institution, the person responsible for making the payment shall, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rate of [twenty] per cent.]

Recent Cases / Related Cases / Case Law

  • May 2011: Cal.: Income of a foreign cricket team for participating in a cricket match in India is taxable u/s. 115BBA and therefore, section 194E is attracted
    • The amount paid to the foreign team for participation in the match in India in any shape, either as prize money or as the administrative expenses, is the income deemed to have accrued in India and is taxable under section 115BBA and thus, section 194E is attracted
    • However, the payments made to the Umpires or Match Referees do not come within the purview of section 115BBA because the Umpires and Match Referee are neither sportsmen (including an athlete) nor are they non-resident sports association or institution so as to attract the provisions contained in section 115BBA, although the payments made to them are "income" which have accrued in India, yet, those are not taxable under the aforesaid provision and thus, the liability to deduct tax under section 194E would never accrue. - [2011] 11-109

Other related Sections from the Act

  • Section 2 of Income-Tax Act, 1961: Definitions. Includes meanings of various terms used in the Indian Income Tax Act, 1961
  • Section 194: Dividends
  • Section 194A: Interest other than "Interest on securities"
  • Section 194B: Winnings from lottery or crossword puzzle
  • Section 194BB:Winnings from horse race
  • Section 194C: Payments to contractors
  • Section 194D: Insurance commission

Other Sections from the Act