Advertisement

CA Aspirant Criticizes ICAI’s Exam Reforms, Calls for Quality Over Quantity

CA Aspirant Criticizes ICAI’s Exam Reforms, Calls for Quality Over Quantity VSV Dairies recently posted on X (formerly known as Twitter); he added, "The ICAI...
HomeTaxationIncome TaxHow Sachin Tendulkar Saved Rs. 58 Lakh in Taxes Using Section 80RR

How Sachin Tendulkar Saved Rs. 58 Lakh in Taxes Using Section 80RR

How Sachin Tendulkar Saved Rs. 58 Lakh in Taxes Using Section 80RR

Cricket legend Sachin Tendulkar, when he was very popular and doing many advertisements, used a tax rule called Section 80RR to save about Rs. 58 lakh in taxes on money he earned from outside India, according to a founder of TaxBuddy who posted the same on his social media platform x (Previously known as Twitter), where he explained how the Master Blaster’s tax strategy worked.

Founder further added, Sachin Tendulkar was able to do this because he divided his income into two parts, one as a professional cricketer and another as a performing artist (for ads and brand endorsements).

By treating his ad income as a “performing artist”, he qualified for a special tax deduction under Section 80RR, which allowed him to pay less tax on his foreign earnings.

However, according to several media reports, in tax filings for Assessment year 2001-02 and Assessment year 2004-05, Sachin Tendulkar claimed a 30% deduction under Section 80RR on Rs. 5.92 crore of earnings from abroad and defended against a tax demand from the authorities on the same.

Sachin Tendulkar earned foreign income of around Rs. 5.92 crore in forex for which he claimed a 30% tax deduction under Section 80RR, which amounts to around Rs. 1.77 crore. The income was from earning abroad for advertisement shoots for brands such as ESPN-Star Sports, Pepsi and VISA, as per the founder.

The founder also noted that Sachin Tendulkar, in his filings, claimed that he “wasn’t a cricketer but an actor to save Rs. 58 lakhs in taxes.” However, a tax officer issued a demand and penalty on him. As per the founder, Sachin Tendulkar “called himself an actor and that single word changed everything,” adding that the cricketer “proved” that the deductions were sought for earnings attached to acting jobs.

Sachin Tendulkar vs. I-T Department

Sachin Tendulkar had earned money from doing foreign advertisements and endorsements (such as modelling and acting in TV ads). He claimed a tax deduction under Section 80RR, which gives benefits to people who earn money abroad from artistic or creative work (like actors, musicians, writers, etc.).

The Income Tax Department said, “Sachin is a cricketer, not an actor. These ad earnings are just extra income, so he can’t use 80RR.”

However, the Income Tax Appellate Tribunal (ITAT) disagreed. It said:

  • Acting and modelling need creativity and artistic skill.
  • A person can have more than one profession- Sachin can be both a cricketer and an actor for ads.
  • The money he earned from foreign ads came from his work as an actor/model, not from playing cricket.

So, ITAT ruled in Sachin’s favour. And he was allowed to claim the full deduction under Section 80RR saving him about Rs. 58 lakhs in taxes on Rs. 1.77 crore of ads income.