Section 115BBA Income Tax Act (Tax NRI Sportsmen)

Section 115BBA deals with the Special provision for computing tax on non-resident sportsmen or sports associations. The following article is an detailed explanation of Special provision for computing tax on non-resident sportsmen which includes being a sportsman (including an athlete), who is not a citizen of India and is a nonresident, includes any income received and 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 etc.

Eligible assessee and special rate of tax

Where the total income of an assessee,

  1. being a sportsman (including an athlete), who is not a citizen of India and is a nonresident, includes any income received or receivable by way of—
    1. participation in India in any game (other than a game the winnings where from are taxable under section 115BB) or sport; or
    2. advertisement; or
    3. contribution of articles relating to any game or sport in India in newspapers, magazines or journals; or
  2. 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 where from are taxable under section 115BB) or sport played in India ; or
  3. 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,

the income-tax payable by the assessee shall be the aggregate of—

  • the amount of income-tax calculated on income referred to in clause (A) or clause (B) or clause (C) at the rate of twenty per cent; and
  • the amount of income-tax with which the assessee would have been chargeable had the total income of the assessee been reduced by the amount of income referred to in clause (A) or clause (B) or clause (C) :

No other deduction

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 clause (a) or clause (b) or clause (c).

Filing of return of Income not required

The assessee is not required to furnish under sub-section (1) of section 139 a return of his income if—

  • his total income in respect of which he is assessable under this Act during the previous year consisted only of income referred to in clause (a) or clause (b) or clause (c) of sub-section (1); and
  • the tax deductible at source under the provisions of Chapter XVII-B has been deducted from such income.

Section 115BBA Income Tax Act Tax NRI Sportsmen

Example:

During the financial year 2017-18, Nadal, a tennis professional and a non-Indian citizen participated in India in a Tennis Tournament and won the prize money of Rs.15 lacs.

He contributed articles on the tournament in a local newspaper for which he was paid Rs.1 Lac. He was also paid Rs.5,00,000 by a Soft Drink company for appearance in a T.V. advertisement.

Although his expenses in India were met by the sponsors, he had to incur Rs.3,00,000 towards his travel costs to India. He was a non-resident for tax purposes in India. What would be his tax liability in India for A.Y. 2018-19? Is he required to file his return of income?

Solution:

Under section 115BBA, all the three items of receipts in India viz. prize money of Rs.15 lakhs, amount received from newspaper of Rs.1 lakh and amount received towards TV advertisement of Rs.5 lakhs – are chargeable to tax.

No expenditure is allowable against such receipts. The rate of tax chargeable under section 115BBA is 20%, plus education cess @2% and secondary and higher education cess @1%. The total tax liability works out to Rs.4,32,600 being 20.6% of Rs.21 lakhs. Thus, Nadal will be liable to tax on the income earned in India. He is not required to file his return of income if –

  • his total income during the previous year consists only of income arising under section 115BBA; and
  • the tax deductible at source under the provisions of Chapter XVII-B have been deducted from such incomes.

Conclusion: Special provision for computing tax on non-resident sportsmen

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