Sunanda Pushkar [ Images ], friend of former minister of state for external affairs Shashi Tharoor [ Images ] and embroiled in the Indian Premier League [ Images ] (IPL) controversy, will have to pay income tax on her "sweat equity" in Rendezvous Sports World even after having given it up.
According to an official in the finance ministry, Pushkar, if an employee of Rendezvous, would have to pay 33 per cent perquisite tax. Otherwise, she is liable to pay gift tax under section 56 of the Income Tax Act, since the shares were given to her without taking any consideration (compensation). "The value of shares will be determined by a merchant banker if it is a perquisite tax," the official said.
Last week, IPL commissioner Lalit Modi [ Images ] had tweeted that Pushkar was a part of the consortium that owned the Kochi franchise and that she had been gifted equity worth Rs 70 crore.
The opposition charged Tharoor of misusing his office to lobby for the Kochi team-owners. In what was reported as an attempt to save Tharoor, she had said she would surrender the equity.
Legal experts, however, are of the view that there was no provision of returning the sweat equity under the Income Tax Act and she would have to pay tax. Besides, surrendering of equity does not mean anything, since shares do not get extinguished. Even in the case of gift, the shares are irrevocable.
Pushkar had said last week that the 19 per cent of the 25 per cent equity of Rendezvous Sports World in the Team Kochi for her was just on paper and she was yet to get the stock estimated at over Rs 70 crore.