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[Cernunnos]

'Actor' Tendulkar allowed to claim tax deduction

http://timesofindia.indiatimes.com/sports/off-the-field/Actor-Tendulkar-allowed-to-claim-tax-deduction/articleshow/8538195.cms


MUMBAI: An Income Tax tribunal has allowed ace cricketer Sachin Tendulkar to claim deductions from his taxable income pertaining to earnings from modelling in advertisements.

The two-member tribunal, which gave its order on May 20, upheld the cricket legend's argument that he was an 'actor' while appearing in commercials.

Asha Vijayaraghavan, judicial member of the tribunal, and RK Panda, accountant member, gave the ruling on four appeals filed by the batting maestro against the verdict of chief commissioner of Income Tax (Appeals) for assessment years 2001-02 to 2004-2005.

Tendulkar argued that he had claimed deductions under Section 80 RR of I-T Act on the ground that he was an 'actor' while appearing in advertisements. He submitted that the CIT (A) had wrongly held that he was not an actor as cricket was his principal profession.

Tendulkar further argued that he was a cricketer and not a professional actor. He submitted his appearances in advertisements made him an actor and thus he was entitled to deductions. Moreover, he argued that such deductions had been allowed to him earlier.

He cited cases of popular figures like Amitabh Bachchan, Shah Rukh Khan (they are not actors?  maybe he has a point about SR Khan..) , Tarun Tahilyani and Harsha Bhogale, who had also claimed deductions from their income through advertisements.

"In the present case, the assessee, while appearing in advertisements and commercials, has to face the lights and camera. As a model, the assessee brings to his work a degree of imagination, creativity and skill to arrange elements in a manner that would affect human senses and emotions and to have an aesthetic value," the tribunal held.

"No doubt, being a successful cricketer, it has added to his brand value as a model. But the fact remains that the assessee has to use his own skills, imagination and creativity. Every person, or for that matter every sportsman, do not possess that degree of talent or skill or creativity and face the lights and camera etc, ( that explains why he gets so many ads.. his profound acting skills.. )" the members said.

"We are of the considered opinion that the income received by the assessee from modelling and appearing in TV commercials and similar activities can be termed as income derived from the profession of an artist," they said.

Therefore, there is no bar on the part of the assessee to have its second profession as an artist apart from playing cricket, the tribunal noted.

"We accordingly hold that the amount of Rs 5,92,31,211 received by the assessee amounts to income derived by the assessee in the exercise of his profession as an artist and therefore entitled to deduction u/s 80RR of the Act."

The tribunal noted that Tendulkar had received an amount of Rs 19,92,27,085 as gross receipts from sports sponsorship and advertisements, which included an amount of Rs 5,92,31,211 received in convertible foreign exchange from ESPN Star Sports, Pepsico Inc and VISA.

The cricketer had claimed deduction u/s 80 RR amounting to Rs 2,08,59,707 on account of receipt of Rs 5,92,31,211.

[RicePlateReddy]

I don't think Tendulkar did anything shady (not sure that you are implying that?)

The tax code seems to give some credit for actors and also accepts that modeling for ads can be considered a secondary career. And he utilized that advantage. The problem if any, if with the tax code, than people exploiting the provision, no?

[dextrous]

I don't think Tendulkar did anything shady (not sure that you are implying that?)

The tax code seems to give some credit for actors and also accepts that modeling for ads can be considered a secondary career. And he utilized that advantage. The problem if any, if with the tax code, than people exploiting the provision, no?

or that there is a such a provision for actors making above a certain amount of income.

[Cernunnos]

I don't think Tendulkar did anything shady (not sure that you are implying that?)

The tax code seems to give some credit for actors and also accepts that modeling for ads can be considered a secondary career. And he utilized that advantage. The problem if any, if with the tax code, than people exploiting the provision, no?

Of course it's shady.

I don't buy the "tax planning" argument. I could understand if he was not warned about it. He's been getting these deductions since the late 90s. However in 2007, these tribunals were exposed by the CAG in it's report to parliament deeming the deductions illegal - making a clear distinction between modeling and acting. Instead of making an honourable exit, he has apparently made the same argument.

The deduction is allowed only if he is exercising his profession as an actor. We had discussed this when Bhogle claimed he was an actor and his application was rightly rejected. Actually I would say that Bhogle might still have had a wafer thin argument (especially for keeping a straight face when Sidhu is in the house), but SRT's case is just pure nonsense - he is not a professional actor and you know it. He does not get these endorsement deals because of his acting skills. And it's abhorrent that he should claim that his superior imagination and aesthetic values which he brings to the screen as a model for foreign brands makes him eligible for tax benefits.

If Amitabh can be bashed for claiming he's a farmer, there is no difference here.

[feverpitch]

Hear, Hear!!!

[Cover Point]

fact remains the problem is with the crap tax code and the loop holes for the millionaires. If someone can legally exploit those loop holes then they always would. The people clamoring should be complaining about the corrupt governments and the fact that they leave these effing loop holes.

Since this has been known for a while now, what has stopped the Congress-Commie combine to close these loop holes for the millionaires .... nah billionaires over the last 4-5 years?

[ruchir]

http://www.incometaxindia.gov.in/acts/income%20tax%20act/80rr.asp


80RR. Deduction in respect of professional income from foreign sources in certain cases.

Where the gross total income of an individual resident in India, being an author, playwright, artist, musician, actor or sportsman (including an athlete), includes any income derived by him in the exercise of his profession from the Government of a foreign State or any person not resident in India, there shall be allowed, in computing the total income of the individual, a deduction from such income of an amount equal to-

     (i) sixty per cent. of such income for an assessment year beginning on the 1st day of April, 2001;

     (ii) forty-five per cent. of such income for an assessment year beginning on the 1st day of April, 2002;

     (iii) thirty per cent. of such income for an assessment year beginning on the 1st day of April, 2003;

     (iv) fifteen per cent. of such income for an assessment year beginning on the 1st day of April, 2004,

as is brought into India by, or on behalf of, the assessee in convertible foreign exchange within a period of six months from the end of the previous year or within such further period as the competent authority may allow in this behalf and no deduction shall be allowed in respect of the assessment year beginning on the 1st day of April, 2005 and any subsequent assessment year equal to seventy-five per cent of such income, as is brought into India by, or on behalf of, the assessee in convertible foreign exchange within a period of six months from the end of the previous year or within such further period as the competent authority may allow in this behalf.

     Provided that no deduction under this section shall be allowed unless the assessee furnishes a certificate, in the prescribed form, along with the return of income, certifying that the deduction has been correctly claimed in accordance with the provisions of this section.

     Explanation.-For the purposes of this section, the expression "competent authority" means the Reserve Bank of India or such other authority as is authorised under any law for the time being in force for regulating payments and dealings in foreign exchange.

----------------------------------------------------------------------------------------------------

The law is pretty clear. An actor can claim deduction on income (earned in foreign currency) earned for services provided as an actor. This law was probably enacted at a time when dollar reserve in India was very low, so govt wanted to encourage inbound traffic of dollars. This law is not needed anymore and can be completely removed. Just tax whatever income is earned from whatever source, based on current tax brackets.

The contention is whether a model can be called an actor or not. If a cricketer appears in a TV advertisement, it is quite obvious that the cricketer is not appearing in the capacity of a cricketer. He has to appear in some other capacity.

An Example - Clint Eastwood has primarily been an actor. He has been directing films too. So when he wins an Oscar award for best director (Million Dollar Baby), he does not win it in the capacity of an actor even though he acted in the movie. He wins it in the capacity of a director.

Similarities - Eastwood got to directing movies because he became famous as an actor. SRT got the Ads because he became famous as a cricketer. Eastwood's acting and directing careers are separate, even though latter happened because of former. SRT's cricket and modelling careers should also be separate even though latter happened because of former. If Eastwood directs a movie without acting in it (Changling), he is paid for his services as a director, not actor. Similarly if SRT appears in an Ad, he is paid for his services as a model, not cricketer.

Question is - Do models act? Answer is - Yes IMO. If not, then what else do they do?

[dave_dj]

Ruchir - the Clint Eastwood example does not work - they are different roles in the same profession.

If there is a loophole, people will take it.  SRT wants to make more money and retain it.  It's always the tax code.  IRS used to obnoxiously take tax from my meager earnings while at college while CP eats in fancy restaurants and makes specific comfort trips while enumerating those as entertainment expenses for tax deduction.

[ruchir]

Ruchir - the Clint Eastwood example does not work - they are different roles in the same profession.

If there is a loophole, people will take it.  SRT wants to make more money and retain it.  It's always the tax code.  IRS used to obnoxiously take tax from my meager earnings while at college while CP eats in fancy restaurants and makes specific comfort trips while enumerating those as entertainment expenses for tax deduction.

Look, forget about the profession for a second. Just look at how an individual is earning money.

Eastwood earns money in two capacities - Actor, Director.
SRT earns money in two capacities - Cricketer, Model.

For Eastwood, his two money earning capacities are not mixed. For SRT we say that he can not be an actor because he is a cricketer. So, can a movie director be called an actor? No IMO.

The main question is can a model be called an actor or not, because SRT is claiming deduction as an actor. I don't know what else can you call a TV model, if not an actor.

One distinction to be made will be if SRT is claiming deductions for his earning as Model from print media (newspapers, magazines, websites etc) or not; or his earning from radio Ads. He can not claim these earning as earning by an actor. Maybe he can if his lawyers can prove that photo models and radio artists are also actors.

That's why, and I agree with you, this law is now a bad law with lots of loopholes and should be removed from tax code. Either that or they should give their definition for the word Actor.

[dave_dj]

Models are no actors even though Bollywood thinks they can make actors out of models.  If SRT acted in a movie - that would be being an actor.  I don't consider SRT being an actor because of modeling - I am not sure if you would even call him a model - he endorses capitalizing his credibility as a cricketer. 

At the end if the tax code says that models are actors, and SRT can and will take the benefit if that.

[ruchir]

Models are no actors even though Bollywood thinks they can make actors out of models.  If SRT acted in a movie - that would be being an actor.  I don't consider SRT being an actor because of modeling - I am not sure if you would even call him a model - he endorses capitalizing his credibility as a cricketer. 

At the end if the tax code says that models are actors, and SRT can and will take the benefit if that.

Issue is that tax code does not define actor. If it did we would not be having this discussion. We don't know what definition tax code goes by.

What does an actor do? He portrays a character, acts out a situation. What does a TV model do? He too portrays a character, acts out a situation.

SRT models for Nikon camera. In the Ad, he does not portray a cricketer. He is just a person telling you benefits of Nikon camera. He is moving around, speaking dialogues. So in that Ad, is he a cricketer or an actor?

A TV model sell a product by acting out a situation.
An actor sells a story by acting out situations.
What's the difference? 

[Cernunnos]

ruchir, I referred to the CAG report of 2007 earlier. Please see this:

http://www.hindu.com/thehindu/holnus/007200705141966.htm
The CAG said the department's argument that the assessee had derived it in the capacity of artist was not acceptable as he had received it in the capacity of model which cannot be construed as an artist for this provision.

The CAG has clearly said a model is not an actor. After such a strong rebuke, that too in the Parliament of India, SRT went back for an appeal. While he is within his rights to do so, this should be seriously noted, as it is not in the manner befitting an icon.

Look, the issue is not just about the nature of the profession of a model or an actor. One needs to look into the logic behind the tax break. The idea it seems is to promote Indian arts and culture by giving an incentive to professions which unquestionably promote the same, such as authors, playwrights, artists, musicians and actors, which are not always the most highly paid professions. You just need to ask yourself is SRT promoting Indian arts and culture by telling us to drink more Pepsi or use Castrol GTX. Then you will get the answer whether he deserves a tax break.

The loophole is not in the laws, but in the star-struck personnel in the tribunal, and the stars who utilize their stardom in such unscrupulous ways. All I can say is I hope someone files a PIL in the HC just like it was done in Ferrarigate.

[Cover Point]

Ruchir - the Clint Eastwood example does not work - they are different roles in the same profession.

If there is a loophole, people will take it.  SRT wants to make more money and retain it.  It's always the tax code.  IRS used to obnoxiously take tax from my meager earnings while at college while CP eats in fancy restaurants and makes specific comfort trips while enumerating those as entertainment expenses for tax deduction.

What does me eating in fancy upscale restaurants like McDonalds have to do with tax deductions? A business expense is a business expense (and I dont work for myself)

There are plenty of loop holes in the US tax code BUT taxing college students (vs Millionaires) is not one of them. The tax code will tax smaller earnings at a lower rate and higher earnings at a higher rate.

The issue here is what the loop holes are and how can some antiquated ideas (of actors not being taxed) should be removed. If there is a legal loop hole you cant blame Tendulkar (or even Ganguly) for using it.

[RicePlateReddy]

The idea it seems is to promote Indian arts and culture by giving an incentive to professions which unquestionably promote the same, such as authors, playwrights, artists, musicians and actors, which are not always the most highly paid professions. You just need to ask yourself is SRT promoting Indian arts and culture by telling us to drink more Pepsi or use Castrol GTX. Then you will get the answer whether he deserves a tax break.

Good point. I think they should have an income phase-out clause also, to avoid mega rich actors taking advtg of breaks.

The loophole is not in the laws, but in the star-struck personnel in the tribunal, and the stars who utilize their stardom in such unscrupulous ways.

I agree that the tribunal is at fault for loosening the interpretation. I would guess that Tendulkar has gone with what his tax advisors are saying, not that it absolves him of the lack of ethics here.

I agree with you as I did not have the full context earlier. It is shady.

All I can say is I hope someone files a PIL in the HC just like it was done in Ferrarigate.

Can a citizen file a PIL without a lawyer? If so, you should - seriously.

[dave_dj]

Ruchir - the Clint Eastwood example does not work - they are different roles in the same profession.

If there is a loophole, people will take it.  SRT wants to make more money and retain it.  It's always the tax code.  IRS used to obnoxiously take tax from my meager earnings while at college while CP eats in fancy restaurants and makes specific comfort trips while enumerating those as entertainment expenses for tax deduction.

What does me eating in fancy upscale restaurants like McDonalds have to do with tax deductions? A business expense is a business expense (and I dont work for myself)

There are plenty of loop holes in the US tax code BUT taxing college students (vs Millionaires) is not one of them. The tax code will tax smaller earnings at a lower rate and higher earnings at a higher rate.

The issue here is what the loop holes are and how can some antiquated ideas (of actors not being taxed) should be removed. If there is a legal loop hole you cant blame Tendulkar (or even Ganguly) for using it.

The history of tax is rooted in taking from the rich who has much to lose if the country is not protected.  The whole tax thing turned upside down.  Reagan started taxing students for their scholarship and assistantships.

I am saying the same thing you are saying.  If there is a loophole, people will take advantage of it.  KoP and Cernunnos are right in saying that it may not be ethical using a loophole especially if you understand the purpose of a law but it is not illegal either to take that advantage.

[ruchir]

ruchir, I referred to the CAG report of 2007 earlier. Please see this:

http://www.hindu.com/thehindu/holnus/007200705141966.htm
The CAG said the department's argument that the assessee had derived it in the capacity of artist was not acceptable as he had received it in the capacity of model which cannot be construed as an artist for this provision.

The CAG has clearly said a model is not an actor. After such a strong rebuke, that too in the Parliament of India, SRT went back for an appeal. While he is within his rights to do so, this should be seriously noted, as it is not in the manner befitting an icon.

Look, the issue is not just about the nature of the profession of a model or an actor. One needs to look into the logic behind the tax break. The idea it seems is to promote Indian arts and culture by giving an incentive to professions which unquestionably promote the same, such as authors, playwrights, artists, musicians and actors, which are not always the most highly paid professions. You just need to ask yourself is SRT promoting Indian arts and culture by telling us to drink more Pepsi or use Castrol GTX. Then you will get the answer whether he deserves a tax break.

The loophole is not in the laws, but in the star-struck personnel in the tribunal, and the stars who utilize their stardom in such unscrupulous ways. All I can say is I hope someone files a PIL in the HC just like it was done in Ferrarigate.

If CAG is the authority that writes tax laws and tax codes for Indian Income Tax department, then their word is final - that SRT is not an actor when he is modelling on TV. CAG can always say that since they wrote this particular section of tax code (80 RR), this is how they interpret it.

If CAG is not the authority who writes the tax laws, then they can only take a shot at interpreting it. It will be contested in the court if the other party disagrees.

As for the logic behind the tax deduction, in today's India this deduction is not required anymore. No artist, musician, painter etc should get any kind of deduction on foreign income anymore. World knows India quite well now. So anyone who claims this deduction is being unethical, and that would put a lot of people in the unethical category. Reality is that if a deduction is there, people will claim it. It all comes down on how "actor" is defined for the purpose of claiming deduction.

While we are discussing the ethics and such of availing this deduction, please read the following:

------------------------------------------------------------------------------------------------------

http://law.incometaxindia.gov.in/Directtaxlaws/act2005/sec_080rr.htm

SECTION 80RR l PROFESSIONAL INCOME FROM
FOREIGN SOURCES IN CERTAIN CASES

614. Whether term ‘artist’ includes photographers and TV cameramen for the purposes of deduction under the section

1. Section 80RR was inserted through the Finance Act, 1969, and will have effect from April 1, 1970.  Under this section, a resident individual, being an author, playwright, artist, musician or actor who derives income, in exercise of his profession, from foreign sources and receives such income in India and brings it into the country in foreign exchange in accordance with the Foreign Exchange Regulation Act, 1947, is entitled to deduct 25 per cent of the income so received or brought, in the computation of his total income.

2. In this connection, the Board had occasion to examine whether the term “artist” includes photographers and TV news-film cameramen.  It has been decided that photographers and TV cameramen can be regarded as artistes for the purpose of section 80RR.

     Circular : No. 31 [F. No. 77/69-IT(A-I)], dated 25-10-1969.

Judicial analysis

Referred to - In Prem Prakash v. ITO [1992] 42 ITD 130 (Delhi - Trib.).

615. Whether person, who receives payment for film which has been produced, directed or scripted by him, would be entitled to deduction under section 80RR

1. Section 80RR of the Income-tax Act, 1961 provides that an individual resident in India, being an author, playwright, artist, musician, actor or sportsman (including an athlete) who derives income in exercise of his profession from the Government of a foreign State or any person not resident in India shall be entitled to a deduction from his income of (i) 50% of such income, or (ii) 75% of such income as is brought into India in accordance with the Foreign Exchange Regulation Act, 1973 and rules made thereunder, whichever is higher.

2. By Circular No. 3l, dated 25-10-1969 the Board clarified that photographers and TV cameramen can be regarded as artists for the purposes of section 80RR of the Act.  A question has been raised whether a person, who receives payment for a film which has been produced, directed or scripted by him, would be entitled to deduction under section 80RR of the Act.  The Board has examined the matter and is of the view that a script writer can be regarded as “ playwright” and similarly “director” can be treated as an ‘artist’ for the purposes of section 80RR of the Act.  However, a producer would not be entitled to deduction under section 80RR of the Act, because he does not fall under any of the categories mentioned in the said section.

     Circular : No. 675, dated 3-1-1994.

616. Association or 1 under the section for the purposes of deduction of remuneration received therefrom

------------------------------------------------------------------------------------------------------

Since we are talking about why this deduction was introduced, the logic as we call it, pay attention to the bold red portions. A TV news cameraman can be called an artist. A script writer can be called a playwright. So what can we interpret from this? Can someone interpret how a TV cameraman promotes art and culture? Can someone try? And is every cameraman, who claims deduction under this section, an unethical person?

The thing is that once you have a tax code that allows you to claim a particular deduction and leave bits and parts of the code open for interpretation, then you can not blame a person from trying to claim a deduction under it.

If a TV news cameraman can claim deduction under the guise of being an artist, then SRT the model can surely claim deduction under the guise of being an actor. SRT being an actor is more believable than a TV news cameraman being an artist IMO.

[Cernunnos]

The idea it seems is to promote Indian arts and culture by giving an incentive to professions which unquestionably promote the same, such as authors, playwrights, artists, musicians and actors, which are not always the most highly paid professions. You just need to ask yourself is SRT promoting Indian arts and culture by telling us to drink more Pepsi or use Castrol GTX. Then you will get the answer whether he deserves a tax break.

Good point. I think they should have an income phase-out clause also, to avoid mega rich actors taking advtg of breaks.

The loophole is not in the laws, but in the star-struck personnel in the tribunal, and the stars who utilize their stardom in such unscrupulous ways.

I agree that the tribunal is at fault for loosening the interpretation. I would guess that Tendulkar has gone with what his tax advisors are saying, not that it absolves him of the lack of ethics here.

I agree with you as I did not have the full context earlier. It is shady.

All I can say is I hope someone files a PIL in the HC just like it was done in Ferrarigate.

Can a citizen file a PIL without a lawyer? If so, you should - seriously.

I checked on this, apparently there are too many hurdles to cross to prove that I've some track record in being socially conscious and I'm not just any busybody  However SC or HC has apparently converted letters into PIL in some cases.. In any case the IT department should challenge the tribunal judgement, like in the Tarun Tahiliani case: http://www.lawetalnews.com/NewsDetail.asp?newsid=3371

[Cernunnos]

ruchir, I referred to the CAG report of 2007 earlier. Please see this:

http://www.hindu.com/thehindu/holnus/007200705141966.htm
The CAG said the department's argument that the assessee had derived it in the capacity of artist was not acceptable as he had received it in the capacity of model which cannot be construed as an artist for this provision.

The CAG has clearly said a model is not an actor. After such a strong rebuke, that too in the Parliament of India, SRT went back for an appeal. While he is within his rights to do so, this should be seriously noted, as it is not in the manner befitting an icon.

Look, the issue is not just about the nature of the profession of a model or an actor. One needs to look into the logic behind the tax break. The idea it seems is to promote Indian arts and culture by giving an incentive to professions which unquestionably promote the same, such as authors, playwrights, artists, musicians and actors, which are not always the most highly paid professions. You just need to ask yourself is SRT promoting Indian arts and culture by telling us to drink more Pepsi or use Castrol GTX. Then you will get the answer whether he deserves a tax break.

The loophole is not in the laws, but in the star-struck personnel in the tribunal, and the stars who utilize their stardom in such unscrupulous ways. All I can say is I hope someone files a PIL in the HC just like it was done in Ferrarigate.

If CAG is the authority that writes tax laws and tax codes for Indian Income Tax department, then their word is final - that SRT is not an actor when he is modelling on TV. CAG can always say that since they wrote this particular section of tax code (80 RR), this is how they interpret it.

If CAG is not the authority who writes the tax laws, then they can only take a shot at interpreting it. It will be contested in the court if the other party disagrees.

As for the logic behind the tax deduction, in today's India this deduction is not required anymore. No artist, musician, painter etc should get any kind of deduction on foreign income anymore. World knows India quite well now. So anyone who claims this deduction is being unethical, and that would put a lot of people in the unethical category. Reality is that if a deduction is there, people will claim it. It all comes down on how "actor" is defined for the purpose of claiming deduction.

While we are discussing the ethics and such of availing this deduction, please read the following:

------------------------------------------------------------------------------------------------------

http://law.incometaxindia.gov.in/Directtaxlaws/act2005/sec_080rr.htm

SECTION 80RR l PROFESSIONAL INCOME FROM
FOREIGN SOURCES IN CERTAIN CASES

614. Whether term ‘artist’ includes photographers and TV cameramen for the purposes of deduction under the section

1. Section 80RR was inserted through the Finance Act, 1969, and will have effect from April 1, 1970.  Under this section, a resident individual, being an author, playwright, artist, musician or actor who derives income, in exercise of his profession, from foreign sources and receives such income in India and brings it into the country in foreign exchange in accordance with the Foreign Exchange Regulation Act, 1947, is entitled to deduct 25 per cent of the income so received or brought, in the computation of his total income.

2. In this connection, the Board had occasion to examine whether the term “artist” includes photographers and TV news-film cameramen.  It has been decided that photographers and TV cameramen can be regarded as artistes for the purpose of section 80RR.

     Circular : No. 31 [F. No. 77/69-IT(A-I)], dated 25-10-1969.

Judicial analysis

Referred to - In Prem Prakash v. ITO [1992] 42 ITD 130 (Delhi - Trib.).

615. Whether person, who receives payment for film which has been produced, directed or scripted by him, would be entitled to deduction under section 80RR

1. Section 80RR of the Income-tax Act, 1961 provides that an individual resident in India, being an author, playwright, artist, musician, actor or sportsman (including an athlete) who derives income in exercise of his profession from the Government of a foreign State or any person not resident in India shall be entitled to a deduction from his income of (i) 50% of such income, or (ii) 75% of such income as is brought into India in accordance with the Foreign Exchange Regulation Act, 1973 and rules made thereunder, whichever is higher.

2. By Circular No. 3l, dated 25-10-1969 the Board clarified that photographers and TV cameramen can be regarded as artists for the purposes of section 80RR of the Act.  A question has been raised whether a person, who receives payment for a film which has been produced, directed or scripted by him, would be entitled to deduction under section 80RR of the Act.  The Board has examined the matter and is of the view that a script writer can be regarded as “ playwright” and similarly “director” can be treated as an ‘artist’ for the purposes of section 80RR of the Act.  However, a producer would not be entitled to deduction under section 80RR of the Act, because he does not fall under any of the categories mentioned in the said section.

     Circular : No. 675, dated 3-1-1994.

616. Association or 1 under the section for the purposes of deduction of remuneration received therefrom

------------------------------------------------------------------------------------------------------

Since we are talking about why this deduction was introduced, the logic as we call it, pay attention to the bold red portions. A TV news cameraman can be called an artist. A script writer can be called a playwright. So what can we interpret from this? Can someone interpret how a TV cameraman promotes art and culture? Can someone try? And is every cameraman, who claims deduction under this section, an unethical person?

The thing is that once you have a tax code that allows you to claim a particular deduction and leave bits and parts of the code open for interpretation, then you can not blame a person from trying to claim a deduction under it.

If a TV news cameraman can claim deduction under the guise of being an artist, then SRT the model can surely claim deduction under the guise of being an actor. SRT being an actor is more believable than a TV news cameraman being an artist IMO.

The final authority on law is the Supreme Court. CAG is the supreme auditing body in India. Their opinions are of great significance. Sure SRT can appeal, but how far should he take it. The matter is not a life and death issue for him, and the indictment by CAG should have chastised him. If it goes to the SC, it is like appealing to the ICC chairman to intervene on a decision of whether a fielder brushed the boundary ropes while saving four.

Coming back to the logic of 80RR, from the Tahiliani link in mym last post: "The revenue department claims that the expression "artist" in Section 80RR must be restricted to the field of fine arts as the purpose of the provision is to show case Indian culture abroad." Now to show case Indian culture abroad, the support staff are also needed. It cannot be a one man show. Therefore I presume they have included camera-men and screenplay writers in the definition.

Secondly, as per Section 80RR you need to show a certificate of exemption. So it's not just a tick mark. Proper reasoning has to be given. Therefore I don't think this is easily abused.

I don't think it's a bad law to keep. An Indian classical musician for example still depends on foreign junkets to maintain a decent standard of living. But yes, it has to be tightened with income caps, and definitions can be made more specific.

[WicketView]

Firstly, in line with what has already been said a number of times, this is a stupid rule in spirit.

Secondly, (but actually this is more important in my opinion) lawmakers who write laws like this (without defining actor) need to be kicked out. The opinion voiced by many like DaveDJ that models are not actors is popular and OK for our conversations where we use it to distinguish between performance levels (though I would hasten to add that a lot of actors often have blurred that distinction, and I am not certain that all movies promote art and culture), but in order to make it a law you need to be able to define the boundary between artist and modelling.

But since this thread was about Sachin Tendulkar and not lawmakers, let me return to the point of the thread:
a) The CAG has no authority to take a final decision on this. I don't see why one should not appeal and (more so) if the board decides to grant the appeal. Cernunnos makes a point about the tribunal board being "star struck". If a possibility of such bias  exists (in fact it does), then what is there to suggest that such anti SRT bias may not have influenced the CAG?

b) In the original post, cernunnos adds a question about Amitabh Bacchan and Shah Rukh Khan not being actors. If "modelling" for a commercial advertisement is subject to deductions
as "income due to acting" , then I don't see any problem with **any** model claiming deductions for their profession. Note the precedence throws out the "spirit" and "promotion of Indian arts and culture" argument in its entirety. I think the argument put forward about precedence is absolutely correct.

[Cernunnos]

Firstly, in line with what has already been said a number of times, this is a stupid rule in spirit.

Secondly, (but actually this is more important in my opinion) lawmakers who write laws like this (without defining actor) need to be kicked out.

The opinion voiced by many like DaveDJ that models are not actors is popular and OK for our conversations where we use it to distinguish between performance levels (though I would hasten to add that a lot of actors often have blurred that distinction, and I am not certain that all movies promote art and culture), but in order to make it a law you need to be able to define the boundary between artist and modelling.

But since this thread was about Sachin Tendulkar and not lawmakers, let me return to the point of the thread:
a) The CAG has no authority to take a final decision on this. I don't see why one should not appeal and (more so) if the board decides to grant the appeal. Cernunnos makes a point about the tribunal board being "star struck". If a possibility of such bias  exists (in fact it does), then what is there to suggest that such anti SRT bias may not have influenced the CAG?

Appeal was granted by a tribunal (you pay Rs 1000/- for these appeals). This is below the status of High Court. CAG is very senior constitutional position, appointed by the President. It is inappropriate to compare possible bias levels of the tribunal and CAG. Moreover CAG did not look at the specific case of SRT, but more at the principle of the exemptions. The tribunal is directly answering SRT.

b) In the original post, cernunnos adds a question about Amitabh Bacchan and Shah Rukh Khan not being actors. If "modelling" for a commercial advertisement is subject to deductions
as "income due to acting" , then I don't see any problem with **any** model claiming deductions for their profession. Note the precedence throws out the "spirit" and "promotion of Indian arts and culture" argument in its entirety. I think the argument put forward about precedence is absolutely correct.

I was not sure about which AB case was being referred. He has one where he is a farmer (pending in SC). The other where he claimed to be an actor on KBC, is also in SC. I don't know the SRK cases. Tahiliani is in SC, and Harsha Bhogle lost his case.

[WicketView]

a) The CAG has no authority to take a final decision on this. I don't see why one should not appeal and (more so) if the board decides to grant the appeal. Cernunnos makes a point about the tribunal board being "star struck". If a possibility of such bias  exists (in fact it does), then what is there to suggest that such anti SRT bias may not have influenced the CAG?

Appeal was granted by a tribunal (you pay Rs 1000/- for these appeals). This is below the status of High Court. CAG is very senior constitutional position, appointed by the President. It is inappropriate to compare possible bias levels of the tribunal and CAG.

OK, there are many levels to this.

Undoubtedly, the CAG is an important position. But, I do not believe that position alone as
a guide to what is appropriate or not (... here which is a free form discussion, standards would be different if this was a newspaper for example). Forget the CAG, is the president or prime-minister exempt from any form of criticism? What I do believe is that it is improper to read intent into any official's work without due justification. Once that is gone, everything is a free-for-all.

What you can talk about is whether an interpretation  is correct or wrong. You can hold that
the tribunal's interpretation is wrong, and the CAG is correct. You can also argue that the CAG's interpretation can trump the appeal board. Which is perfectly fine, since the income tax department can fight the case. At some point it should reach suitable authorities.

Moreover CAG did not look at the specific case of SRT, but more at the principle of the exemptions. The tribunal is directly answering SRT.

Well, the news article you posted was unclear. The headlines, and a number of things about these income being related to the profession of sportsperson directly pertained to SRT. The model artist issue was simply dangling leaving it unclear whether it pertained to the duo, or why it was in the article.

b) In the original post, cernunnos adds a question about Amitabh Bacchan and Shah Rukh Khan not being actors. If "modelling" for a commercial advertisement is subject to deductions
as "income due to acting" , then I don't see any problem with **any** model claiming deductions for their profession. Note the precedence throws out the "spirit" and "promotion of Indian arts and culture" argument in its entirety. I think the argument put forward about precedence is absolutely correct.

I was not sure about which AB case was being referred. He has one where he is a farmer (pending in SC). The other where he claimed to be an actor on KBC, is also in SC. I don't know the SRK cases. Tahiliani is in SC, and Harsha Bhogle lost his case.

According to your original post, AB and SRK have received deductions for advertisements as actors. If they can receive deductions for "acting" in advertisements, so should a sportsperson. Just because their profession is acting, (leaving aside  whether actors should receive any deductions at all) it makes little sense to offer deductions on the income they earn from advertisement and deny the same to a sportsmn.

[Cernunnos]

a) The CAG has no authority to take a final decision on this. I don't see why one should not appeal and (more so) if the board decides to grant the appeal. Cernunnos makes a point about the tribunal board being "star struck". If a possibility of such bias  exists (in fact it does), then what is there to suggest that such anti SRT bias may not have influenced the CAG?

Appeal was granted by a tribunal (you pay Rs 1000/- for these appeals). This is below the status of High Court. CAG is very senior constitutional position, appointed by the President. It is inappropriate to compare possible bias levels of the tribunal and CAG.

OK, there are many levels to this.

Undoubtedly, the CAG is an important position. But, I do not believe that position alone as
a guide to what is appropriate or not (... here which is a free form discussion, standards would be different if this was a newspaper for example). Forget the CAG, is the president or prime-minister exempt from any form of criticism? What I do believe is that it is improper to read intent into any official's work without due justification. Once that is gone, everything is a free-for-all.

True, ideally we should assume that officials at every level work without any bias, but then reality doesn't match theory. We have seen in the past how star struck Ravi Gaikwad was and the friendship he built with SRT later in the Ferrari case. That's why there are multiple levels of competency. CAG is expected to be more competent and dispassionate about the matter than a tribunal member will be, that's all I'm saying.

What you can talk about is whether an interpretation  is correct or wrong. You can hold that
the tribunal's interpretation is wrong, and the CAG is correct. You can also argue that the CAG's interpretation can trump the appeal board. Which is perfectly fine, since the income tax department can fight the case. At some point it should reach suitable authorities.

Yes, all this is going to happen, which is why I said in the fitness of things SRT should have made an honourable exit once the CAG report was tabled in parliament.

Moreover CAG did not look at the specific case of SRT, but more at the principle of the exemptions. The tribunal is directly answering SRT.

Well, the news article you posted was unclear. The headlines, and a number of things about these income being related to the profession of sportsperson directly pertained to SRT. The model artist issue was simply dangling leaving it unclear whether it pertained to the duo, or why it was in the article.

My point is the CAG has a ton of other things to put in that report other than SRT. He was under no compulsion to look up only SRT. In principle he can look up anyone's tax returns. So when you are at that level, it is not expected that being star-struck would be an issue.

b) In the original post, cernunnos adds a question about Amitabh Bacchan and Shah Rukh Khan not being actors. If "modelling" for a commercial advertisement is subject to deductions
as "income due to acting" , then I don't see any problem with **any** model claiming deductions for their profession. Note the precedence throws out the "spirit" and "promotion of Indian arts and culture" argument in its entirety. I think the argument put forward about precedence is absolutely correct.

I was not sure about which AB case was being referred. He has one where he is a farmer (pending in SC). The other where he claimed to be an actor on KBC, is also in SC. I don't know the SRK cases. Tahiliani is in SC, and Harsha Bhogle lost his case.

According to your original post, AB and SRK have received deductions for advertisements as actors. If they can receive deductions for "acting" in advertisements, so should a sportsperson. Just because their profession is acting, (leaving aside  whether actors should receive any deductions at all) it makes little sense to offer deductions on the income they earn from advertisement and deny the same to a sportsmn.

Well.. as I said I wasn't sure which AB case was being referred. The point is: AB, TT and HB have NOT received deductions, the first two are pending and HB's stands rejected. This is SRT's claim to the tribunal that they have received deductions. Moreover each case is different - neither AB, TT or HB are being challenged to be models for ad work, like SRT is. So it's apples and oranges. In fact I would say that SRT's case is the most frivolous of all four.