After the Board of Control for Cricket in India (BCCI),which was asked to pay more than Rs 400 crore as tax to the government,it is now the turn of the cricket associations affiliated to the BCCI to lose their charitable society status and tax exemptions.
The Income-Tax department has issued notices to the Uttar Pradesh and Haryana cricket associations,asking them to furnish details of their charitable activities in order to be eligible for I-T exemptions.
These associations are registered under section 25 of the Companies Act,making them eligible for tax exemptions under section 11 of the I-T Act,1961. The non-profit companies registered under section 25 are supposed to promote commerce,art,religion,science,charity without any motive of earning profit.
The associations has been asked to clarify as how they fulfil all the conditions of section 25 of the Companies Act and what charitable activities are being undertaken to become eligible for relevant exemptions as per the provisions of the I-T Act.
The I-T authorities feel that with the advent of IPL,the game has ventured into the commercial arena and therefore,liable to be taxed.
For assessment year 2009-2010,the BCCIs income stood at over Rs 964 crore and the I-T department has demanded a tax of Rs 413 crore. The cricketing body was earlier getting tax exemption.
A senior UP Cricket Association official confirmed that an I-T notice has been received and the association will contest it. Jyoti Bajpai,who is on the board of directors of UPCA and an executive member,said that the UPCA has charitable status under section 25 but the government has now removed sports from the category. The taxes are likely to be levied with retrospective effect,said Bajpai.
IPL chairman Rajiv Shukla is the secretary of UPCA and a member of its board of directors.
The Haryana Cricket Association has also been asked to present documents to justify its charitable status.