Tax inspectors target top Bollywood stars

Both the actresses were rudely awakened at 7.30 in the morning, by Income Tax officials who then proceeded to search their suburban apartments. Other IT sleuths also raided the offices of the stars, besides the homes of their secretaries. According to IT sources, the ‘searches’ were in connection with alleged evasion of tax by the two top Bollywood actors. However, the IT department refused to reveal the outcome of the raids and an official said it would take time to find out whether they had actually concealed their incomes.

Both Katrina and Priyanka are among the two top actresses in Bollywood, earning from Rs35 million to Rs50 million for a film. They also earn millions by way of product endorsements and performing live at events, though both have been extremely selective about where they appear. Hong Kong-born Katrina — whose mother is English, and who modelled in England before shifting to Mumbai following a break in Bollywood about six years ago — has been making waves after her sizzling ‘item number,’ Sheila ki Jawaani in Tees Maar Khan, a film that was released last month.

The IT department frequently conducts raids on Bollywood stars, especially when they suspect that some of them conceal their actual income. The entry of corporates into the entertainment sector has resulted in transparency, with most payments being made through cheques. However, the IT department suspects that some of the payments could be in cash or kind and conducts raids and searches whenever the advance tax payment from celebrities decline.

Bollywood stars contribute a significant chunk of tax payments in Mumbai. Last year for instance, Akshay Kumar paid Rs180 million as tax (as against Rs310 million in the previous year). Other top celebrity tax-payers from Bollywood include Amir Khan, Shah Rukh Khan, Salman Khan, Saif Ali Khan, Abhishek Bachchan and Aishwarya Rai.

Of course, the highest tax-payers in India are entrepreneurs. Last year (fiscal 2009-10), Analjit Singh, the chairman of Max India, paid advance tax of nearly Rs1 billion, making him the highest individual tax-payer. He was followed by Asim Ghosh, the former CEO of Vodafone Essar (Rs750 million). Other top tax-payers include businessmen such as Pallonji Shapoorji Mistry and Mukesh Ambani, politician Mayawati, the chief minister of Uttar Pradesh, and Sachin Tendulkar, the cricketer.

nithin@khaleejtimes.com