14 July 2024
The exemption of payments made to sports tournaments in Gujarat from tax depends on several factors, primarily on whether the tournament is recognized and approved by the appropriate authorities under Section 10(23)(vi) of the Income Tax Act, 1961.
Here’s a simplified breakdown:
1. **Section 10(23)(vi) of Income Tax Act, 1961**: This section provides exemption to income of any university or other educational institution, hospital, or other institution established for charitable purposes, subject to certain conditions.
2. **Conditions for exemption**: For sports tournaments to be exempt from tax under this provision, they generally need to be recognized by the relevant authorities. This recognition ensures that the income generated by such tournaments is used for the promotion of sports and related activities rather than for profit-making purposes.
3. **Approval and Recognition**: The specific sports tournament in Gujarat would need to be recognized and approved by the appropriate authority designated under Section 10(23)(vi). This typically involves obtaining recognition from bodies such as the Sports Authority of Gujarat or other recognized sports bodies.
4. **Verification**: It's crucial to verify the specific tournament’s recognition status with the local tax authorities or a tax consultant who can provide updated information on whether the exemption applies.
Since tax laws can be complex and subject to change, especially regarding exemptions, it's advisable to consult with a tax professional or accountant who can provide guidance tailored to the specific details of the sports tournament in question. They can ensure compliance with current regulations and advise on any documentation required to claim exemption under the Income Tax Act, 1961.
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