Sachin Tendulkar saved tax on foreign income from advertisements by calling himself an ‘actor’. He claimed exemption under Section 80RR, which was upheld by the Tax Tribunal. With this decision, Sachin saved about Rs 58 lakh.
KriCAT legend Sachin Tendulkar saved Rs 58 lakh by declaring himself an ‘actor’ before the Income Tax Department. Sujit Bangar, founder of TaxBuddy.com, has recently shared interesting information about this financial trick of Sachin in a post on the X platform.
What was that ‘acting trick’?
This matter is of the financial year 2002-03. Sachin earned Rs 5.92 crore as foreign income by working in advertisements for brands like Pepsi, Visa and ESPN. Instead of showing this income as that of a ‘cricketer’, Sachin described it as the income from the profession of an ‘actor’. After this, he demanded 30% tax exemption under Section 80RR of the Income Tax Act.
Section 80RR gives tax exemption on foreign earnings to writers, playwrights and artists. Sachin did not call himself a cricketer. He called himself an actor and just this one word changed everything, the post said.
Income Tax Department protested
But, the tax assessing officer did not accept this argument of Sachin. The officer said, ‘You are a cricketer; Advertisement is just a work related to that. This should be treated as ‘income from other sources’ and will not be eligible for exemption of 80RR. But, Sachin’s argument was that he has done modelling/acting, which is the profession of an actor, hence 80RR should be applicable. Subsequently, the Income Tax Appellate Tribunal had to decide how to define a person as an ‘actor’.
The decision came in favor of Sachin
The tribunal ruled that any work that involves imagination and creativity falls within the definition of ‘actor’. He clarified that modeling and TV advertisements are also included in this. The tribunal also ordered that Sachin has two professions – one as a cricketer and the other as an actor. Earnings from advertisements were considered as earnings from acting. Ultimately, the tribunal accepted Sachin’s argument and ordered exemption under Section 80RR on the earnings from foreign advertising. This means that Sachin saved around Rs 58 lakh in tax.
Sujit Bangar says that this incident is an example of how correct understanding of tax law and taking appropriate steps according to the situation can lead to victory. This trick of Sachin is proof that anyone can take full advantage of tax laws.