'Actor, Not Cricketer': How Sachin Tendulkar Saved Rs 58 Lakh In Income Tax Using Section 80RR Deduction

A fascinating chapter from Sachin Tendulkar’s financial playbook, one where the cricket legend turned “actor” to save Rs 58 lakh in income tax, could be an example for many professionals and freelancers in the creative fields.

In a recent post on X (formerly Twitter), Sujit Bangar, founder of Taxbuddy.com, narrated how the iconic cricketer saved lakhs in taxes with a smart trick.

“Sachin Tendulkar wasn’t a ‘cricketer.’ He claimed he was an actor, to save Rs 58 lakh in taxes,” Bangar wrote.

According to Bangar, the issue dates back to the financial year 2002-03, when Tendulkar earned Rs 5.92 crore in foreign income from endorsements for brands like Pepsi, Visa and ESPN. Instead of declaring this under his income as a cricketer, Tendulkar classified the earnings as part of his “actor” profession and claimed a 30% deduction under Section 80RR of the Income Tax Act, 1961.

Section 80RR is meant for authors, playwrights, artists (actors, musicians and sportsmen) and other performers earning foreign income.

“Sachin didn’t call himself a cricketer. He called himself an actor, and that single word changed everything,” Bangar wrote in his post.

The assessing officer (AO), however, disagreed. “AO’s stance: ‘You’re a cricketer; endorsements are incidental. Treat it under Other Sources; no 80RR,’” Bangar wrote. Tendulkar’s defence, as he recounted, was simple: “I performed modelling/acting. That’s an actor's profession; 80RR applies to it.”

The Income Tax Appellate Tribunal (ITAT) then had to decide on what exactly constituted an “actor.” As Bangar summarised, “ITAT read ‘actor’ broadly: work involving skill, imagination and creativity for aesthetic output, modelling/TV ads qualify.”

This interpretation proved crucial. The tribunal concluded that Tendulkar could indeed be considered to have two professions, one as a cricketer and another as an actor. “You can pursue more than one profession: cricketer and actor. The ad income arose from the acting profession,” Bangar wrote.

Source Link: https://www.ndtvprofit.com/amp/personal-finance/actor-not-cricketer-how-sachin-tendulkar-saved-rs-58-lakh-in-income-tax-using-section-80rr-deduction

Website Link: https://www.taxbuddy.com/


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