New Delhi: It’s not just IPL Chairman Lalit Modi who is laughing his way to the bank. Even the Income Tax department has managed to extract its pound of flesh from cricket's hottest new avtaar. CNBC-TV18 learns that as many as five of the eight franchisees have made a TDS payout of Rs 60 crore.
Three of them have deducted TDS at 11.33 per cent on the payments made to their players and two teams have deducted TDS at 2.33 per cent.
The I-T dept has clarified that TDS will be deducted at 11.33 per cent and so it expects to net a cool Rs 80 crore once the other franchisees pay up and those who have underpaid clear their balance.
The projections for the current fiscal are even more bullish. The I-T department hopes to mop up up to Rs 200 crore from the second edition of the IPL.
But the controversy over tax treatment of player transfers has still not been resolved. The I-T department is still grappling over whether to treat players as stock in trade or as assets.
If they are to be treated as stock in trade then a sale will be treated as income and the seller will be taxed accordingly.
But if players are to be treated as assets, a sale will only entail capital gains tax. Sources say the I-T department has set up a committee to look into the issue.
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