Do you know Indian cricket legend Sachin Tendulkar once proved himself an “actor” to save lakhs in taxes? Over a decade ago, the cricket icon found himself in a legal disagreement with the Income Tax Department regarding the interpretation of a tax rule.
Sujit Bangar, Founder of TaxBuddy.com, shared this interesting case on ‘X’ (formerly Twitter). He wrote, “Sachin Tendulkar wasn’t a ‘cricketer.’ He claimed he was an actor — to save Rs 58 lakh in taxes. The tax officer slapped a demand on him. But here’s how the Master blaster proved himself as an ‘actor,’ not a cricketer, and won the case.”
How the whole case began
This case dates back to when Sachin earned a substantial amount from some overseas endorsements 2001-02 and 2004-05. He advertised for brands like Pepsi, VISA, and ESPN-Star Sports and showed foreign income of Rs 5.92 crore. On this income, he claimed a 30% exemption under Section 80RR, a deduction of approximately Rs 1.77 crore.
But the Income Tax Department objected. The department said, “You’re a cricketer; endorsements are incidental. Treat it under Other Sources; no 80RR.”
This means that “you are a professional cricketer; the income earned from advertising is not related to your primary profession, so this exemption is not available”.
Sachin’s defence
Sachin responded, “I performed modeling/acting. That’s an actor’s profession; 80RR applies to it.” He argued that he modeled or acted in advertisements, which is an artist’s work. And according to the law, a person can have more than one profession — that is, they can be both a cricketer and an actor simultaneously.
What does the law say?
Section 80RR of the Income Tax Act provides tax relief to professionals who are writers, artists, actors, musicians, or sportsmen and who have earned income from foreign sources. In such cases, the entire foreign income is exempt from tax.
Real question: Does appearing in advertisements constitute acting?
ITAT’s decision – “Sachin is also an actor”
Finally, the matter reached the Income Tax Appellate Tribunal (ITAT). The Tribunal delivered a very interesting ruling. It stated that the definition of “actor” cannot be narrowly defined. The Tribunal held that – “Work involving skill, imagination, and creativity for aesthetic output – modeling/TV ads qualify.”
This means that the skill, imagination, and creativity required in modeling and TV advertising qualify as acting.
The Tribunal clearly stated that Sachin’s income from advertising is the result of “artistic performance,” not work related to cricket. Therefore, he should be eligible for tax exemption under Section 80RR.
Result – Savings of approximately Rs 58 lakh
Following the ITAT’s decision, Sachin was allowed a deduction of Rs 1.77 crore. In total, he saved approximately Rs 58 lakh in taxes.
An interesting lesson
This case has an important lesson: a person can have more than one profession. For example, in Sachin’s case, he is not only a legendary cricketer but also an actor when he’s on camera promoting a brand.
Sujit Bangar wrote: “One person, two professions. The ad income arose from the actor profession.”
This case of Sachin has become a precedent in the world of tax and professional law, that if your work involves creativity, skill, and imagination, you can be not just an athlete, but also an artist.