447 : Circular No. 447, dated 22-01-1986

SECTION 4 OF THE INCOME-TAX ACT, 1961 - INCOME TAX - CHARGE OF - CLARIFICATION AS TO WHETHER AWARDS RECEIVED BY A SPORTMAN, WHO IS NOT A PROFESSIONAL, WILL BE LIABLE TO TAX IN HIS HAND WHEN IT WOULD NOT BE IN NATURE OF INCOME

CIRCULAR NO. 447 [F.NO.199/1/86-IT(A-I)], DATED 22-1-1986

[SUPERSEDED BY CIRCULAR NO. 2/2014 [F.NO.199/01/2014-ITA.I], DATED 20-1-2014]

33. Whether award received by an amateur sportsman is taxable as his income in his hands

1. The Central Board of Direct Taxes had occasion to consider the question whether the award received by a sportsman, who is not a professional, will be taxable in his hands or not. In the case of a sportsman, who is a professional, the award received by him will be in the nature of a benefit in exercise of his profession and, therefore, will be liable to tax under the provisions of the Income-tax Act. However, in the case of a non-professional, the award received by him will be in the nature of a gift and/or personal testimonial. In view of this, it is clarified, that such awards in the case of a sportsman, who is not a professional, will not be liable to tax in his hands as it would not be in the nature of income. The question whether a sportsman is a professional or not will depend upon the facts and circumstances of each case to be decided by the Assessing Officer.

2. In cases where such receipt is in the nature of gift, the chargeability to gift-tax will be considered separately.