Exemption to cricketers u/s 57(iii). - Income Tax - 1432/CBDT

INSTRUCTION NO. 1432/CBDT Dated: November 26, 1981 The Board has received representations from the Board of Control for Cricket in India and the cricketers association for exemption from income-tax of the amount received by a player on being selected to play official test matches for India. It has been claimed that the players have to incur considerable expenditure for kit and gear, boarding and conveyance at the test centres. It has been pointed out that playing in test cricket is the culmination of long years of practice and playing in matches of lesser importance. Considerable expenditure has to be incurred by a player before he can reach the level of being selected to play for India in Test cricket. 2. A test cricketer on selection to play a test match receives Rs.10,000 per test . Out of this amount Rs. 6000 relates to the expenditure to be incurred on food, gear etc., . The balance of Rs.4000 is to be credited to the player's account in a players benevolent fund to be maintained by the Board of Control for Cricket in India. The question of taxability or otherwise of the latter amount will be decided after further details are received from the Board of control for cricket in India. 3. A cricketer if he is not a professional is assessable to tax in respect of the amount of Rs.6000 received per test under the head 'income from other sources'. U/s.57(iii) of the I.T.Act expenditure laid out or expended wholly and exclusively for the purpose of making or earning the income is allowable as a deduction. 4. The Board has considered the representations. Having regard to the years of preparation that go in with the attendant expenditure before a cricketer qualifies for selection in test cricket and the expenditure incurred by him while actually playing a test, it is considered that 75% of the amount of Rs.6000 received per test can be taken to represent the expenditure referred to in sec.57(iii). As regards receipts from foreign tours, the deduction can be 50% of the receipts for playing in foreign countries. This 50% will be allowable only where no portion of the receipts is credited to the Benevolent fund as in the case of test matches played in India. In regard to receipts for playing in matches other than tests in India the entire receipts would be deemed to have been spent having regard to the totality of the circumstances and the fees received in this regard. 5. These instructions may be brought to the notice of all officers working in your charge.