AR Rahman’s Income Tax controversy: Here’s what we know
New Delhi : Recently, AR Rahman’s name came up stating that the Income Tax department moved the High Court, and filed a case against the composer. Now, there are reports coming up explaining what really happened in the case.
The Oscar-winning composer signed a 3-year agreement with a US-based company, and he was paid Rs 3 crore for the same. However, AR Rahman asked them to send the said amount to his trust’s account.
This became an issue as all of the trust’s income would be exempted from tax under Section 11 and 13 of the Income Tax Act 1961. Had he received the amount directly to his account, he would have paid the tax, says the senior standing counsel for the income tax department, TR Senthil Kumar, according to The Times Of India. Apparently, this act is also violation under Foreign Contribution (Regulation) Act, 1976, as it involves fund from overseas.
TOI quoted TR Senthil Kumar as saying, “He had entered into a three-year agreement with a company in the UK to compose ringtone for them, for which, an amount of over ` 3 crore was agreed to be paid. But he had said that the amount could be sent to his foundation. For a trust, if it fulfills some conditions, all its income would be exempted from tax under Section 11 and 13 of the Income Tax Act 1961. By routing the full money to the trust, he does not want to pay tax.”
Admitting the appeal, a High Court division bench of Justices T S Sivagnanam and V Bhavani Subbaroyan ordered a notice to be issued to Rahman.