A tax break should not become a means of avoiding taxation, but a voluntary tax exemption is not such a bad idea
Sports journalist
I don’t see why the law should be bent. Winning the World Cup was a splendid display of excellence. But that was also the main purpose of playing the tournament
Over the six weeks that the tournament was played, I predicted in various forums that India will win the cricket World Cup. Am I worthy of an award (better still, reward) by some state government as were those who went onto the field and achieved this success?
| WHO EARNED WHAT | ||
| By | For | What |
| ICC | Full team | Rs 13.2 crore |
| BCCI | Each player | Rs 1 crore each |
| Coach, support staff | Rs 50 lakh each | |
| Selectors | Rs 25 lakh each | |
| Railways | Each player | Lifetime I AC pass for self and companion |
| Delhi govt | M S Dhoni, as captain; | Rs 2 crore |
| Virender Sehwag, Gautam Gambhir, Virat Kohli, Ashish Nehra | Rs 1 crore each | |
| Punjab govt | Harbhajan Singh, Yuvraj Singh | Rs 1 crore each |
| Maharashtra govt | Sachin Tendulkar, Zaheer Khan | Rs 1 crore each |
| Uttarakhand govt | M S Dhoni, Sachin Tendulkar | House or plot in Mussoorie; Stadium to be built and named after Dhoni |
I am being facetious, of course. Like every Indian, I rejoiced in the triumph of M S Dhoni and his merry band. Winning the World Cup 28 years after Kapil Dev’s team had done this in 1983 is a big deal, believe me. I witnessed the first deed, and the long period since has been one of multiple heartbreaks — more so for the cricketers than fans and hacks.
Having lived off writing on cricket for more than 30 years, I understand the pressures, pains and travails that go into the making of an international player. The game looks all too easy on a 20-inch screen, but it is far, far more difficult on the field. Add to this a billion armchair critics ready to give advice, to pillory a player for not succeeding, which adds enormously to the hardship quotient of an Indian cricketer.
Too many people have argued for far too many years that Indian cricketers are overpaid vis-à-vis other sportspersons, but I disagree. This is a trite argument that has no currency at least in the current environment in which a lot more non-cricket achievers like Saina Nehwal and Vijender Singh have also been amply rewarded.
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I am not saying that non-cricketers earn as much as cricketers today; that comparison would be odious. But high performers from other disciplines are not struggling as much as their forerunners did because the socio-economic conditions in India have changed dramatically in the past two decades.
Ergo the Indian team deserves our thanks and more — even the crores of rupees that are being hurled at them from all quarters. But I don’t see why the law of the land has to be bent for this and why they shouldn’t be taxed. Winning the World Cup was obviously a splendid display of excellence. But that was also the main purpose of playing the tournament, and at an existential level, also the reason for a cricketer to be.
Several state governments in India have given the winning cricketers additional monetary awards, which must also be taxed. There have been disquieting news reports that some of these governments have dipped their fingers into their education funds to reward the cricketers. It is hard to imagine that any well-earning sportsperson would approve of such actions.
The governments in question would have been more in line if they had instituted scholarships for needy students in the name of the stars rather than use up much-needed funds. Instead, in the euphoria over the victory, everyone tried to jump on the cash dole-out bandwagon, without much thought or consideration.
Of course, sportspersons looking to avoid taxation is hardly a new trend, although I am not suggesting that India’s cricketers fall into this category at all. Former tennis great Boris Becker, for instance, fought a long war with the German tax authorities about sharing his earnings.
Monaco is a popular tax haven for sportspersons to set up dual residence, as much as it is for celebrities from the world of entertainment, or business tycoons looking to avoid tax. Ever since Bjorn Borg set up base in this Mediterranean principality, it has become a favourite among tennis stars.
However, as the joke goes, it has some of the highest real estate prices in the world, so what you make on the roundabouts, you lose on the swings!
Death and taxes, as Benjamin Franklin famously said, are the only two things certain in life. This maxim applies as much to large corporations as it does to high net-worth individuals, and those much below that sort of earning bracket who nevertheless fall within the tax net. There’s certainly no reason why cricketers should be exempt.
Of course, the Bharat Ratna for Sachin Tendulkar is something else altogether. It’s a shame that sports does not feature in the criteria for this award. If there is some rule that needs to be amended, it is here, not in the tax policy.
Promoter of Maharashtra Premier League
When a cricketer’s career ends, not everybody gets an opportunity to become a commentator, umpire or coach. So there is a case to protect their income
Benjamin Franklin said, “In this world nothing is certain but death and taxes.” A tax break is, of course, discretionary. The dictionary defines tax breaks as: “Tax break is a slang term referring to any item which reduces tax, including any tax exemption, tax deduction, or tax credit. Tax break is also a pejorative term used in the United States to refer to purportedly favourable tax treatment of any class of persons, as in ‘individuals get a tax break for xxx’.” A tax break is generally considered antisocial in certain societies, while it finds great support in others.
A tax break is normally given on the criteria of profession, age, gender and merit. The tax break for the Indian cricket team falls in the third category: merit. Historically, such breaks have been frowned upon but times are changing. The debate has surfaced after the World Cup rewards for the winning team from the The Board of Control for Cricket in India and others.
Sports enthusiasts like me believe that tax breaks are necessary to promote excellence in sports, like many other countries. Also, promoting sports has a big influence on increasing tourism income, jobs and the overall well-being of society.
There are definite arguments in favour of a tax break for cricketers:
- Cricketers have a somewhat short career, sometimes one or two Test or one-day international matches in their whole lifetime.
Also, when a cricketer is most productive, the competition may be even severe. For example, when Padmakar Shivalkar was in form, the Prasanna-Bedi-Venkataraghavan trio was also at the peak and Shivalkar’s career was very short, especially in the international arena.
- When a cricketer’s career ends, not everybody gets an opportunity to become a commentator, umpire or coach. Many cricketers neglect their education in the service of the nation or for sports. So there is a case to protect their income.
- Many national and international awards are tax-free. Therefore, there is a case for tax exemption on the rewards that the cricketers have got.
- Tax exemptions may encourage many high-earning cricketers to allocate more money for charity.
Of course, there need not be totally indiscriminate tax breaks. It may follow certain guidelines:
- A tax break should be available only for outstanding achievements: A World or Asia Cup win, in all categories of play — Test, one-day international and T-20.
- Certain categories of income should be tax-fee after retirement.
As the table shows, almost everybody who was responsible for the World Cup win got something.
Self-imposed or voluntary tax breaks can also be considered. If the tax is 30 per cent, the player can pay only 15 per cent and the balance can go to a charitable institution of his choice.
Finally, tax breaks can be extended to other games with similar achievements. That will certainly dampen the present opposition to the tax break for the Indian team.