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Friday, 16 September 2011 |
Are fashion designers artists? If so, they can claim income
tax exemptions. This is an issue that has gone to the Supreme Court. Fashion designer Tarun Tahiliani wants tax exemption on his earnings abroad, which the income tax department is contesting. The dispute pertains to Tahiliani’s earnings abroad during 1999-2000. The fashion designer had sought tax deductions on the income earned abroad. The tax effect for the year was Rs 25.80 lakh. Similar appeals for 2000 to 2002 are also pending before the Apex Court.
The income tax department says that dress designers do not fall within the meaning of the word ‘artist’ under the Income Tax Act, 1961. Under Section 80RR of the Act, 75 per cent of the total income earned abroad by an ‘artist’ is exempted from tax. However, such deduction is only available to a resident individual, who is an author, playwright, artist, musician, actor or sportsman to project their activities outside India with a view to contributing to greater understanding of the country and its culture abroad and also augment its foreign exchange resources.
However, the Bombay High Court had said that Tahiliani is an artist and could claim exemption. Challenging the orders of the Bombay High Court, the tax authorities alleged that the expression ‘artist’ in Section 80RR must be restricted to the field of fine arts as the purpose of the provision is to showcase Indian culture abroad. On the other hand, the designer claims that as the work of an artist involves imagination, skill and visualization, dress designing also involves the same art, where a dress designer uses his skill, imagination and creativity while creating a design. Likewise Tahiliani in his reports says that he has only supplied designs of garments to overseas client and received design fees for sending such sketches. |
