The Madras High Court, on Friday, issued a notice to singer-composer AR Rahman for a petition that alleged that he has been routing his income of over Rs 3 crore through his AR Rahman Foundation to exempt from paying tax.
According to several media reports, the singer has been summoned by the High Court to explain the allegations levelled against him.
The Oscar-winning music composer received an income of Rs 3.47 crore in the financial year 2011-2012 or composing an exclusive ringtones for a UK based telecom company, T R Senthil Kumar, the senior standing counsel for the income tax department, said in a statement.
According to Kumar, the contract lasted for three-years and Rahman allegedly asked the UK based company to send payment to his charitable trust to evade tax.
“The income which is taxable must be received by Rahman. After due deduction of tax, it can be transferred to the trust. But the same cannot be routed through the trust as income to the charitable trust is exempted under the Income Tax Act,” a report in Times of India quoted the IT Department counsel as saying.
The department said that charitable trust did not have a license under Foreign Contribution Regulation Act at the time the payment was made, therefore, Rs 3.47 crore was taxable amount and cannot be considered as foreign contributions.
In February this year, the Centre approved the AR Rahman foundation with FCRA license. The trust was registered as being for “cultural, social and educational purposes” under the FCRA.
