According to the Income Tax Department lawyer, Rahman signed a contract with the UK-based telecom company in 2011-12 to make a special ringtone. For which he had an income of Rs 3.47 crore. In this contract, Rahman had asked the company to transfer the amount directly in the name of his charitable foundation.
The trust does not have to pay tax on the income received. In the petition filed against Rahman, the Income Tax Council said – The income that is taxed must definitely be given to Rahman. It can be given to the trust after deduction of tax. But the path Rahman adopted for earning is not correct as the income received by the trust under the Income Tax Act is tax free.
Rahman is alleged to have raised more than Rs 3 crore through his charitable trust AR Rahman Foundation. So that they do not have to pay tax on this amount though the case is 8 years old.
