Introduction
Section 115BBA of the Income Tax Act was introduced in the Union Budget of 2020 to provide tax relief to individuals who are professional athletes or sportsmen. The section allows such individuals to claim tax exemption for their income from international sporting events held in India. In this blog, we will discuss the provisions of Section 115BBA of the Income Tax Act in detail.
Who is eligible for tax exemption under Section 115BBA?
As per the provisions of Section 115BBA, the tax exemption is applicable to resident individuals who are professional athletes or sportsmen. The exemption is applicable only for income received from participating in international sporting events held in India.
What is the duration of tax exemption?
The tax exemption under Section 115BBA is applicable for a period of 10 years, starting from the financial year in which the individual earns the income from international sporting events held in India.
What is the amount of tax exemption?
The entire income earned by the individual from international sporting events held in India is eligible for tax exemption under Section 115BBA. This means that the individual will not be required to pay any tax on such income.
What are the conditions for availing tax exemption under Section 115BBA?
To avail tax exemption under Section 115BBA, the following conditions must be fulfilled:
- The individual should be a resident of India.
- The individual should be a professional athlete or sportsman.
- The income should be earned from participating in international sporting events held in India.
- The income should be received during the period from 1st April 2020 to 31st March 2030.
- The income should be derived from the promotion of sports in India.
- The individual should furnish a declaration to this effect in the prescribed form.
Impact of Section 115BBA on Indian Sports Industry
The introduction of Section 115BBA is expected to have a positive impact on the Indian sports industry. By providing tax relief to professional athletes and sportsmen, the government is encouraging more participation in international sporting events held in India. This, in turn, will lead to the promotion of sports in India and the growth of the sports industry. The exemption is also expected to attract more foreign players to participate in Indian sporting events, which will increase the level of competition and improve the overall quality of sports in the country.
Challenges in Implementing Section 115BBA
While the provisions of Section 115BBA are aimed at promoting sports and providing tax relief to professional athletes and sportsmen, there are some challenges in implementing this section. One of the major challenges is in defining who qualifies as a professional athlete or sportsman. This could lead to disputes and litigation, especially if there is ambiguity in the definition. There could also be challenges in determining whether income is derived from the promotion of sports in India or not, as this is a subjective criterion.
Additional Benefits of Section 115BBA
Apart from providing tax relief to professional athletes and sportsmen, Section 115BBA also offers other benefits. For instance, it helps in promoting sports tourism in India by attracting foreign players and sports enthusiasts to visit the country. This, in turn, could boost the hospitality and tourism industry in India.
Section 115BBA also encourages the development of sports infrastructure in India. The tax relief could attract more investors and sponsors to invest in the development of sports facilities and infrastructure, which could lead to the growth of the sports industry in India.
Furthermore, Section 115BBA could also promote the overall health and fitness of the population. As more people are exposed to sports and fitness through international sporting events, they are likely to be motivated to adopt a healthier lifestyle and participate in sports themselves. This could have a positive impact on public health and well-being.
Conclusion
Section 115BBA of the Income Tax Act is a welcome provision for professional athletes and sportsmen. It provides them with much-needed tax relief for their income earned from participating in international sporting events held in India. The exemption is applicable for a period of 10 years and covers the entire income earned by the individual from such events. However, to avail of the tax exemption, the individual must fulfil certain conditions as specified in the Act.
Read more useful content:
- section 145 of income tax act
- section 10e of income tax act
- section 9 of the income tax act
- section 94b of income tax act
- section 206aa of income tax act
Frequently Asked Questions (FAQs)
- Who is eligible for tax exemption under Section 115BBA of the Income Tax Act?
Resident individuals who are professional athletes or sportsmen are eligible for tax exemption under Section 115BBA for their income earned from participating in international sporting events held in India.
2. How long is the tax exemption applicable under Section 115BBA?
The tax exemption is applicable for a period of 10 years, starting from the financial year in which the individual earns the income from international sporting events held in India.
3. Is the tax exemption applicable to all types of sporting events held in India?
No, the tax exemption is applicable only to income earned from participating in international sporting events held in India.
4. Can non-resident individuals avail tax exemption under Section 115BBA?
No, the tax exemption is applicable only to resident individuals.
5. Do professional athletes and sportsmen need to pay tax on their income earned from international sporting events held outside India?
Yes, income earned from international sporting events held outside India is taxable as per the Income Tax Act.
6. Do professional athletes and sportsmen need to file a separate tax return for income earned from international sporting events?
No, income earned from international sporting events can be included in the regular income tax return filed by the individual.
7. Can individuals claim tax exemption for income earned from national sporting events held in India?
No, the tax exemption is applicable only to income earned from international sporting events held in India.
8. Can income earned from coaching or training in sports be eligible for tax exemption under Section 115BBA?
No, income earned from coaching or training in sports is not eligible for tax exemption under Section 115BBA.
9. Are there any conditions for availing tax exemption under Section 115BBA?
Yes, individuals must fulfill certain conditions, such as being a resident of India, being a professional athlete or sportsman, and earning income from participating in international sporting events held in India.
10. How does Section 115BBA promote the development of sports infrastructure in India?
Section 115BBA provides tax relief to investors and sponsors who invest in the development of sports infrastructure, which could lead to the growth of the sports industry in India.
