Section 194E | TDS on Payment to NRI Sportsmen or Sports Association

Overview

Cricket in India is more than just a sport—it's a passion that can't be captured in a single word. Whether it's an international match featuring the Indian team or an IPL game, the excitement and energy are palpable across the nation. But have you ever stopped to think about how the earnings of foreign players like Angelo Mathews, David Warner, or even umpires are taxed when they play in India? It's not just cricket—athletes from various sports like football, hockey, boxing, and many others frequently travel to India for tournaments. This is where Section 194E comes into play, as it specifically addresses the taxation of income earned by foreign sports professionals in India.

TDS Applicability u/s 194E

Under Section 194E, TDS is required to be deducted by any person responsible for making any specified payment to:

• Non-resident sportsman (including an athlete) who is not a citizen of India
• Non-resident entertainer who is not a citizen of India
• Non-resident Sports Association or Institution.

Following are the payments which are subjected for TDS deduction u/s 194E:

• Payment for “Participating in India in any game or sport (other than winnings from online games which are subjected to TDS u/s 194BA)”.
• Payment for advertisements.
• Payment for “any game or sports being played in India (other than winnings from Online games), in case sum payable to Non-resident sports association”.
• Payment for “Contribution of articles on game or sports in India; in newspapers, magazines or journals etc”.
• Payment to a NRI for performing in India or to a non-resident entertainer who is not a citizen of india.

Rate of TDS u/s 194E

TDS u/s 194E is required to be deducted at the rate of 20%.

When to deduct and deposit TDS u/s 194E?

Time of Deduction:

Under section 194E, TDS is required to be deducted at the earlier of the following:-

• At the time of credit of such income; or,
• At the time of payment of such sum in cash or by cheque or by any other mode.

Time to Deposit:

TDS on Payment to NRI sportsmen or sports association which is deducted u/s 194E and is required to be deposited to the central government. Time to deposit TDS u/s 194E is given below:

For example, TDS is deducted on 15th December and needs to be deposited on or before 7th January. Tax is deducted on 21st March ; needs to be deposited on or before 30th April.

Why choose Bizfoc for TDS?

At Bizfoc, we specialize in providing you the best accounting services in filing your TDS. Here are the reasons why we are known for our services to our clients on filing TDS:

• Assist in suggesting the right documents for TDS filing.
• Providing valuable insights on sections of TDS computations
• Prescribe forms as per the necessity
• Helps in accurate computations for TDS computations and returns
• Tailored advice and guidelines for TDS filing

In general, we assist the client to solve their queries and doubts regarding the documentation, procedures, and fees for filling out the form. Other than making your filing successful, we help you make a better decision by covering every aspect of what you actually need to get your TDS.

Conclusion

In conclusion, Section 194E plays a crucial role in regulating the taxation of income earned by Non-Resident Indian (NRI) sportsmen and sports associations in India. By specifically targeting payments made to foreign athletes, coaches, and related entities, this provision ensures that the government collects the appropriate taxes on earnings generated within Indian territory. As international sports events and tournaments continue to grow in popularity, Section 194E ensures compliance with India's tax laws while maintaining fairness for both domestic and foreign sports professionals. For foreign athletes and sports organizations participating in Indian events, understanding and adhering to these tax obligations is vital to avoid penalties and ensure smooth financial operations. Ultimately, this section helps maintain the integrity of India's tax system while promoting a transparent and well-regulated sports ecosystem.

Frequently Asked Questions? (FAQs)