Bindra's cash rewards not to be taxed
Abhinav Bindra, who has been showered with cash awards totalling more than Rs 4 crore, will not have to pay any tax on these rewards.delhi Updated: Aug 20, 2008 16:34 IST
Beijing Olympics gold medallist Abhinav Bindra, who has been showered with cash awards totalling more than Rs 4 crore for his historic triumph, will not have to pay any tax on these rewards as he has been categorised as a non-professional sportsperson by IT authorities.
The ace shooter, the entrepreneur son of an affluent businessman in Punjab, won the gold medal in the 10m Air Rifle competition in Beijing.
He is being categorised as a non-professional or amateur sportsperson, which is "not liable to tax" under existing Income Tax laws, an IT official said.
According to a Central Board of Direct Taxes (CBDT) 1986 circular, such awards in case of a sportsperson, who is not a professional, will not be liable to tax as it would not be in the nature of income.
It, however, adds "whether a sportsman is a professional or not will depend upon the facts and circumstances of each case to be decided by the assessing officer" and in cases where the receipt is in the nature of gift, the chargeability to gift-tax will be considered separately.
The sporting discipline of rifle shooting is amateur in India and hence any sportsperson practicing the sport will be considered an amateur, a spokesperson of the National Rifle Association of India (NRAI) said.
"The circular is still in force and there are no new specific provisions on cash awards or gifts offered to sportspersons. Such a sportsperson would hence be tax free," a senior Finance Ministry official said.