We are paying a foreign player, a foreign federation and a foreign performer for an event in India. Who is caught by s.194E, at what rate, and does the treaty stop the deduction?
Section 194E as printed on the live departmental page requires the payer to deduct twenty per cent where any income referred to in s.115BBA is payable to a non-resident sportsman (including an athlete) who is not a citizen of India, to an entertainer who is not a citizen of India, or to a non-resident sports association or institution — at credit or payment, whichever is earlier. The section is entirely parasitic on s.115BBA: if the income is not income referred to in that section, there is no s.194E duty at all, which is how payments to umpires and match referees were held to fall outside it.
Decided by the CBDT Circulars & Instructions (Not applicable — statutory text) on 2013-04-01, reported as Section 194E with section 115BBA of the Income-tax Act, 1961, as amended up to 2026. It bears on section 194E, section 115BBA, section 115BB, section 139(1), section 195, section 194J, section 90 of the Income Tax Act 1961, in TDS Defaults, Residence & Treaty Benefit and How Tax Law Is Read matters.
Three things make this section unusual and all three are practical. First, it has no threshold whatsoever — not ten thousand rupees, not anything. A single rupee of s.115BBA income attracts the duty. Second, it fixes its own rate of twenty per cent in the section itself rather than deferring to the rates in force, which is why it is one of the few withholding provisions you can price without opening the Finance Act. Third, and most importantly, it is a machinery provision that runs on the categories in s.115BBA and nothing else — sportsman, athlete, entertainer, non-resident sports association or institution — so the correct question is never 'was this person paid for the event' but 'does this person fall in one of those classes'. The categories widened on 1 April 2013, when the Finance Act, 2012 inserted clause (c) of s.115BBA(1) for an entertainer who is not a citizen of India and is a non-resident, added the corresponding limbs to the charge and the proviso, and substituted 'twenty' for 'ten' as the s.115BBA rate. Note finally what s.115BBA gives the payee in return: no deduction for any expenditure or allowance is allowed in computing the income, and sub-section (2) relieves him of the obligation to file a return under s.139(1) if his total income consisted only of such income and the Chapter XVII-B tax was deducted from it.
Binding on the department, not on the assessee or the courts. An assessee may rely on a circular that is beneficial to them.
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Section 194E as printed on the live page: where any income referred to in section 115BBA is payable to a non-resident sportsman (including an athlete) or an entertainer who is not a citizen of India or a non-resident sports association or institution, the person responsible for making the payment shall, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rate of twenty per cent. Section 115BBA(1) as printed on the Year 2013 page brings to charge, at twenty per cent, income of (a) a sportsman including an athlete who is not a citizen of India and is a non-resident, received or receivable by way of participation in India in any game (other than a game the winnings wherefrom are taxable under section 115BB) or sport, or advertisement, or contribution of articles relating to any game or sport in India in newspapers, magazines or journals; (b) a non-resident sports association or institution, being any amount guaranteed to be paid or payable to it in relation to any game (other than a game the winnings wherefrom are taxable under section 115BB) or sport played in India; and (c) an entertainer who is not a citizen of India and is a non-resident, being any income received or receivable from his performance in India. The proviso denies any deduction for expenditure or allowance in computing that income. Sub-section (2) relieves the assessee of the obligation to furnish a return under s.139(1) where his total income consisted only of such income and the tax deductible under Chapter XVII-B has been deducted from it.
Section 194E imposes a flat twenty per cent withholding, with no threshold, on income referred to in s.115BBA payable to a non-resident sportsman or athlete who is not a citizen of India, to a non-resident entertainer who is not a citizen of India, or to a non-resident sports association or institution, at credit or payment, whichever is earlier. Whether the section applies at all turns entirely on whether the payee falls within a s.115BBA category. On the Year 2013 s.115BBA page, the entertainer category and the twenty per cent rate came in by the Finance Act, 2012 with effect from 1 April 2013, the rate having been ten per cent before that, and the section itself dates from the Direct Tax Laws (Second Amendment) Act, 1989 with effect from 1 April 1990.
Not applicable — this is a statement of the statutory text as printed on the departmental section pages, with the amendment history taken from the footnote apparatus on the s.115BBA page. No judicial reasoning is involved.
194E. Where any income referred to in section 115BBA is payable to a non-resident sportsman (including an athlete) or an entertainer who is not a citizen of India or a non-resident sports association or institution, the person responsible for making the payment shall, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rate of twenty per cent.
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Handle my notice → Ask a CA on WhatsAppSection 194E as printed on the live departmental page requires the payer to deduct twenty per cent where any income referred to in s.115BBA is payable to a non-resident sportsman (including an athlete) who is not a citizen of India, to an entertainer who is not a citizen of India, or to a non-resident sports association or institution — at credit or payment, whichever is earlier. The section is entirely parasitic on s.115BBA: if the income is not income referred to in that section, there is no s.194E duty at all, which is how payments to umpires and match referees were held to fall outside it. This was decided by the CBDT Circulars & Instructions (Not applicable — statutory text) and bears on section 194E, section 115BBA, section 115BB, section 139(1), section 195, section 194J, section 90 of the Income Tax Act 1961. It is reported as Section 194E with section 115BBA of the Income-tax Act, 1961, as amended up to 2026. Three things make this section unusual and all three are practical. First, it has no threshold whatsoever — not ten thousand rupees, not anything. A single rupee of s.115BBA income attracts the duty. Second, it fixes its own rate of twenty per cent in the section itself rather than deferring to the rates in force, which is why it is one of the few withholding provisions you can price without opening the Finance Act. Third, and most importantly, it is a machinery provision that runs on the categories in s.115BBA and nothing else — sportsman, athlete, entertainer, non-resident sports association or institution — so the correct question is never 'was this person paid for the event' but 'does this person fall in one of those classes'. The categories widened on 1 April 2013, when the Finance Act, 2012 inserted clause (c) of s.115BBA(1) for an entertainer who is not a citizen of India and is a non-resident, added the corresponding limbs to the charge and the proviso, and substituted 'twenty' for 'ten' as the s.115BBA rate. Note finally what s.115BBA gives the payee in return: no deduction for any expenditure or allowance is allowed in computing the income, and sub-section (2) relieves him of the obligation to file a return under s.139(1) if his total income consisted only of such income and the Chapter XVII-B tax was deducted from it. If it applies to you, the first step is this: Classify every payee against the s.115BBA categories before deducting: a non-resident sportsman including an athlete who is not a citizen of India; a non-resident entertainer who is not a citizen of India (for years from 1 April 2013); and a non-resident sports association or institution.
Section 194E as printed on the live page: where any income referred to in section 115BBA is payable to a non-resident sportsman (including an athlete) or an entertainer who is not a citizen of India or a non-resident sports association or institution, the person responsible for making the payment shall, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rate of twenty per cent. Section 115BBA(1) as printed on the Year 2013 page brings to charge, at twenty per cent, income of (a) a sportsman including an athlete who is not a citizen of India and is a non-resident, received or receivable by way of participation in India in any game (other than a game the winnings wherefrom are taxable under section 115BB) or sport, or advertisement, or contribution of articles relating to any game or sport in India in newspapers, magazines or journals; (b) a non-resident sports association or institution, being any amount guaranteed to be paid or payable to it in relation to any game (other than a game the winnings wherefrom are taxable under section 115BB) or sport played in India; and (c) an entertainer who is not a citizen of India and is a non-resident, being any income received or receivable from his performance in India. The proviso denies any deduction for expenditure or allowance in computing that income. Sub-section (2) relieves the assessee of the obligation to furnish a return under s.139(1) where his total income consisted only of such income and the tax deductible under Chapter XVII-B has been deducted from it. The matter was decided on 2013-04-01 by the CBDT Circulars & Instructions (Not applicable — statutory text). On those facts the CBDT Circulars & Instructions held as follows. Section 194E imposes a flat twenty per cent withholding, with no threshold, on income referred to in s.115BBA payable to a non-resident sportsman or athlete who is not a citizen of India, to a non-resident entertainer who is not a citizen of India, or to a non-resident sports association or institution, at credit or payment, whichever is earlier. Whether the section applies at all turns entirely on whether the payee falls within a s.115BBA category. On the Year 2013 s.115BBA page, the entertainer category and the twenty per cent rate came in by the Finance Act, 2012 with effect from 1 April 2013, the rate having been ten per cent before that, and the section itself dates from the Direct Tax Laws (Second Amendment) Act, 1989 with effect from 1 April 1990.
Not applicable — this is a statement of the statutory text as printed on the departmental section pages, with the amendment history taken from the footnote apparatus on the s.115BBA page. No judicial reasoning is involved. In the words reproduced by the source cited on this page: "194E. Where any income referred to in section 115BBA is payable to a non-resident sportsman (including an athlete) or an entertainer who is not a citizen of India or a non-resident sports association or institution, the person responsible for making the payment shall, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rate of twenty per cent."
It was decided by the CBDT Circulars & Instructions on 2013-04-01 and is reported as Section 194E with section 115BBA of the Income-tax Act, 1961, as amended up to 2026. Binding on the department, not on the assessee or the courts. An assessee may rely on a circular that is beneficial to them. A CBDT circular or instruction binds officers of the department but not the assessee and not the courts. Where a circular helps you, you may hold the department to it. Where it hurts you, it cannot override the Act or a judgment. On section 194E, section 115BBA, section 115BB, section 139(1), section 195, section 194J, section 90, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It cuts both ways and is cited by both sides. Section 194E imposes a flat twenty per cent withholding, with no threshold, on income referred to in s.115BBA payable to a non-resident sportsman or athlete who is not a citizen of India, to a non-resident entertainer who is not a citizen of India, or to a non-resident sports association or institution, at credit or payment, whichever is earlier. Whether the section applies at all turns entirely on whether the payee falls within a s.115BBA category. On the Year 2013 s.115BBA page, the entertainer category and the twenty per cent rate came in by the Finance Act, 2012 with effect from 1 April 2013, the rate having been ten per cent before that, and the section itself dates from the Direct Tax Laws (Second Amendment) Act, 1989 with effect from 1 April 1990. It arises in TDS Defaults, Residence & Treaty Benefit and How Tax Law Is Read matters, on section 194E, section 115BBA, section 115BB, section 139(1), section 195, section 194J, section 90 of the Income Tax Act 1961, and was decided by Not applicable — statutory text. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. For a payee outside those categories — umpires, match referees, technical officials, contractors — there is no s.194E duty; look instead at s.195 or, for a resident, at s.194J, and check whether Notification No. S.O. 2085(E) dated 21 August 2008 brings the payee within s.194J. Apply no threshold. The section carries none, and a small payment is as much within it as a large one. Deduct twenty per cent at credit to the payee's account or at payment, whichever is earlier, and not at remittance. Do not treat a treaty as switching the section off without reading the specific article — the Calcutta High Court went through six agreements in Indcom and found nothing in them excluding s.115BBA or s.194E, and the Supreme Court decided the point in PILCOM v. CIT, which this library already carries and which should be read before advising either way. Remember the payee's side of the bargain in s.115BBA: no expenditure or allowance is deductible against this income, and a return under s.139(1) is not required where his total income consisted only of such income and tax was deducted under Chapter XVII-B.
Still good law. Both texts are now corroborated on more than one departmental vintage. Section 194E is printed in identical operative words on the live page stamped Year 2026 and on a page stamped Year 2015: where income referred to in s.115BBA is payable to a non-resident sportsman including an athlete, or an entertainer, who is not a citizen of India, or to a non-resident sports association or institution, the payer must deduct tax at twenty per cent at credit or payment, whichever is earlier. Section 115BBA is printed on a page stamped Year 2020 at twenty per cent and covering the non-resident sportsman, the non-resident sports association or institution and the non-resident entertainer, and sub-section (2) still relieves such a person from filing a return under s.139(1) where his total income consists only of s.115BBA income and tax has been deducted under Chapter XVII-B. That matches the Year 2013 text previously read, so two vintages seven years apart agree. What is still missing is a 2025 or 2026 vintage of s.115BBA, and neither s.115BBA page located carries an amendment footnote, so an amendment after 2020 cannot be positively excluded - none was found, and the live s.194E page naming an entertainer and charging twenty per cent is consistent with the Year 2020 text. An older page of s.115BBA stamped Year 2000 shows the section as originally enacted, at ten per cent and without the entertainer, which is a trap for anyone reading the departmental slugs at random. These are provisions of the Income-tax Act 1961, replaced by the Income-tax Act 2025 with effect from 1 April 2026. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
Section 194E, headed 'Payments to non-resident sportsmen or sports associations', prints the twenty per cent rate and the reference to an entertainer, but carries NO footnote list, so nothing in that section dates the rate or the entertainer limb. Those are dated instead from section 115BBA, headed 'Tax on non-resident sportsmen or sports associations', whose text prints clause (c) for an entertainer and the twenty per cent rate and carries the footnotes 'Inserted by the Finance Act, 2012, w.e.f. 1-4-2013' against the entertainer limb and 'Substituted for "ten" by the Finance Act, 2012, w.e.f. 1-4-2013' against the rate; a further footnote records the section itself as inserted by the Direct Tax Laws (Second Amendment) Act, 1989 with effect from 1 April 1990. THE GAP THE READER MUST KNOW ABOUT: the text of s.115BBA set out here is the text as it stood in 2013, and no later text of that section is available for this entry. So s.115BBA's terms as stated above are legislative history and not a verified current position — although the current s.194E's own reference to an entertainer and its own twenty per cent rate are consistent with the 2013 s.115BBA text having survived. Anyone advising on s.115BBA's present terms must read the section as it now stands. Every earlier text of s.115BBA available here prints the pre-2012 position, at ten per cent with clauses (a) and (b) only and no entertainer clause, which confirms what changed in 2012 but says nothing about what has changed since. The umpires and match referees point in the guidance comes from the Calcutta High Court in Indcom v. CIT (TDS), I.T.A. No. 121 of 2004, decided 18 May 2011, which this library carries separately. PILCOM v. CIT is referred to but is not set out here, and nothing in this entry states what it holds. THE decided_on FIELD: it carries a commencement date and not a decision date — 1 April 2013, the date s.115BBA's footnotes give for the insertion of the entertainer clause and the substitution of the twenty per cent rate, which is the most recent commencement date anything used for this entry establishes. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
Section 194E imposes a flat twenty per cent withholding, with no threshold, on income referred to in s.115BBA payable to a non-resident sportsman or athlete who is not a citizen of India, to a non-resident entertainer who is not a citizen of India, or to a non-resident sports association or institution, at credit or payment, whichever is earlier. Whether the section applies at all turns entirely on whether the payee falls within a s.115BBA category. On the Year 2013 s.115BBA page, the entertainer category and the twenty per cent rate came in by the Finance Act, 2012 with effect from 1 April 2013, the rate having been ten per cent before that, and the section itself dates from the Direct Tax Laws (Second Amendment) Act, 1989 with effect from 1 April 1990.
TaxSphere, “Statutory position — s.194E with s.115BBA: withholding on payments to a non-resident sportsman, sports association or entertainer”, https://taxnotice.vittsphere.com/caselaw/case/statutory-position-194e-and-115bba-payments-to-non-resident-sportsmen-sports-associations-and-entertainers/ (validity last checked 2026-09-16)
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