Cricket icons Sachin Tendulkar and Sunil Gavaskar face fresh controversy. The Comptroller and Auditor General of India (CAG), in a report tabled in Parliament on Monday, said both had together been beneficiaries of illegal income-tax exemption of Rs 4.42 crore.
The report — which scrutinised Tendulkar’s foreign exchange earnings from brand endorsements from the financial year 1998-99 to 2004-05 — found that the master blaster earned Rs 16.33 crore in foreign exchange during the seven-year period.
He was granted income tax exemption under Section 80 RR of the Income Tax Act on these remittances, ranging between 15 to 75 per cent of the total amount. This resulted in a total exemption of Rs 8.87 crore.
Had these exemptions not been granted, Tendulkar would have had to pay Rs 3.62 crore more in tax, including interest. CAG said he was not entitled to such exemptions because he earned the money as a “model”, not as a cricketer, which allowed the exemptions. “As the income was not derived from the profession of sportsman, allowance of deduction was not in order. The department’s argument that the assessee (Tendulkar) had derived it in the capacity of an artist was not acceptable as he received this income in the capacity of a model,” it said.
Gavaskar’s tax liability was lower by Rs 80.34 lakh because of exemptions granted for foreign remittances received as a commentator between 2000 and 2003, which the CAG said he was not entitled to.
The IT department has, meanwhile, told CAG that it has “reopened” Tendulkar’s assessments for three years beginning 2000-01, while that of 2004-05 has been selected for scrutiny. The department also said that the CAG’s observations would be “kept in mind” while finalising the assessments.