Going by their income tax returns for the last 10 years, the earnings of the upper crust of the Bombay film world are nowhere near the fabulous sums credited to them by gossip. Bachchan, for instance, was paid only Rs 1 lakh for his performance in the legendary Sholay, and Rs 9 lakh—his highest fee so far—for Ramesh Sippy’s Shakti. Hema Malini’s largest fee so far has been for Dillagi way back in 1977: Rs 5 lakh. Rekha Ganeshan’s income for 1980-81 was Rs 4.25 lakh—after she claimed a number of deductions. And while Bachchan and Dharmendra are the highest paid stars, durable old Ashok Kumar seems to have the most wealth: Rs 26 lakh, according to his wealth tax returns.
Tax operation: These revelations are the high points of a study being made by suspicious mandarins of the Finance Ministry, which is trying to, in the words of a senior income tax officer of Bombay, “identify the points at which black money is actually generated and plug the loopholes”. The massive exercise involves the scrutiny of the income tax returns of over 4,000 persons connected with the Bombay film world, and the tip of the iceberg is composed of 15 actors, playback singers and 10 film distributors. The income tax authorities are going to probe closely for any discrepancies in the mass of financial statements that would unveil the myriad tax fiddles believed to be current in the industry.
The hunt for the black money was sparked off in early 1980 when members of Parliament demanded strict scrutiny of income tax returns filed by the stars. The finance minister assured them that the Government would compare the financial statements given by film distributors, film stars, producers and others of that ilk and focus on any blurred images they discovered. In July 1981, the Central Board of Direct Taxes (CBDT) on instructions from the ministry, fired a lengthy questionnaire at income tax offices in Bombay, asking for a veritable encyclopaedia of information.
The investigators wanted to know the films signed by each actor along with the terms and conditions of the agreement; payments received by the actor, both for films in the making and those completed; the income of leading stars and producers from other sources such as property, distribution agencies, and other commercial ventures; details of the incomes of firms owned by the stars’ relatives; the cost of every film in which the actor played the lead; details of bank accounts held by film stars and producers.
They also asked for the number of searches and seizures made by the authorities and the amount recovered; the cases filed, and the stage the cases were in; and a list of films which had cost over Rs 25 lakh and over Rs 1 crore in the last seven years.
Modest sums: It took the officers nearly 14 months, working in Bombay and Madras, to collect this information. In August 1982, the Bombay income tax authorities called in more staff to tabulate the 10-year income tax and wealth tax returns of the 25 actors, singers and distributors. The actors are the upper crust of the film industry and range from Bachchan, Zeenat Aman and Shatrughan Sinha to the indestructible Ashok Kumar and Pran; the producers include Sippy Films, Raj Kapoor’s R.K. Films, and Manmohan Desai and Rakesh Mehra.
The tax returns reveal that the male or the female lead receives between 2 and 5 per cent of the total cost of production of a film. Kala Pathar was shown to have cost Rs 1.27 crore to make; yet, Amitabh Bachchan received only Rs 5 lakh from it. Similarly, Zeenat Aman, who played the female lead in Subhash K. Desai’s Rs 2.25 crore blockbuster Dharam Veer, had received only Rs 2.05 lakh in three instalments till 1978-79 from the producers. The film’s hero, Dharmendra signed a contract worth Rs 1.50 lakh. In F.K. Films’ Qurbani, which cost Rs 1.55 crore, Zeenat Aman was signed for Rs 3 lakh. According to Hema Malini’s income tax returns, she got only Rs 4.50 lakh of the Rs 1.17 crore spent on Pramod Chakravarty’s Azad.
Revelations: These cold figures directly contradict industry rumours which have the top stars charging astronomical sums. In fact, the returns show that no actor, including Bachchan, ever crossed the Rs 10 lakh mark. His Rs 9 lakh fee for Shakti—according to an agreement signed with M.R. Production Pvt Ltd on September 1, 1978—made him the industry’s most expensive film star. Among the women, Hema Malini’s Rs 5 lakh for Dillagi is still the high-water mark.
The compendium of income tax returns has some more to reveal:
* Raakhee Gulzar, Shabana Azmi, Waheeda Rehman, Manoj Kumar and Vinod Khanna all reported net incomes of around Rs 3 lakh.
* Ten film personalities disclosed that their taxable income after deductions was between Rs 4 lakh and Rs 8 lakh. Sanjeev Kumar, star of over a hundred films, had a taxable income of Rs 7.10 lakh (1980) which has grown from Rs 1.23 lakh during 1971-72. His net wealth during 1980-81 was slightly less than Rs 12 lakh and his income less than Rs 8 lakh. (He also made a disclosure of Rs 10 lakh under the Voluntary Disclosure Scheme during the Emergency). The star has other interests besides acting. He is a director of Roopraj Films Pvt Ltd and owns a share of Sanjeev Properties Pvt Ltd.
* Zeenat Aman, one of the most enduring stars, has a taxable income of Rs 6.39 lakh, making her the wealthiest among the female stars. Her wealth returns in 1981-82 stood at Rs 12.50 lakh, up from Rs 2.64 lakh in 1974-75. Not surprisingly, three of the Kapoor clan figure in the Rs 4 to Rs 8 lakh bracket with Rishi Kapoor (Rs 6.33 lakh in 1978-79), elder brother Randhir (Rs 4.80 lakh in 1978-79) and Shammi Kapoor (Rs 6.01 lakh in 1978-79). But pride of place goes to Lata Mangeshkar, the playback singer who rules the music waves. Her taxable income after deductions stood at Rs 8 lakh in 1980-81 though her income tax returns show her income to be Rs 28,000 per month and her net wealth stands at Rs 30 lakh.
* In comparison, the reigning king of Bombay films, Amitabh Bachchan’s taxable income after deductions was almost half that of Mangeshkar’s (Rs 4.16 lakh in 1980-81). However, Bachchan’s income statements for the last five years show an enduring relationship between his income and his losses in business ventures. During 1978, when his income was Rs 5.37 lakh, the actor suffered a loss of Rs 43,000 in business dealings. The following year, he became the most sought-after star in the business and his income increased sharply, but so did his losses. He regularly bought and sold shares in a company called Raymond Paints Pvt Ltd and his losses on these transactions were usually around Rs 8 lakh each time, allowing him to claim relief from what would otherwise have been a crushing tax burden. He also made liberal donations: Rs 18 lakh to one hospital in 1979-80 out of a pre-tax income of Rs 21.5 lakh and Rs 21.80 lakh to another institution in 1980-81 out of a pre-tax income of Rs 33.5 lakh.
Hence, although the star’s films were cleaning up at the box-office, the amounts shown on his income and wealth tax returns did not change appreciably from 1977-78, when he paid Rs 3.11 lakh as income tax on an assessed income of Rs 5.06 lakh as compared to Rs 4.16 lakh in 1980-81. Bachchan also came up with Rs 10 lakh during the Voluntary Disclosure Scheme. According to his returns, his fees range between Rs 1 lakh and Rs 9 lakh per film.
Only three stars claimed that their taxable income was above Rs 8 lakh: Dharmendra—Rs 13.35 lakh (1980-81). Pran Kishan Sikand—Rs 11.25 lakh (1980-81) and Shashi Kapoor—Rs 8.55 lakh (1977-78).
Half of the stars filed wealth tax returns which showed their wealth as Rs 10 lakh with Waheeda Rehman (Rs 55.000). Vinod Khanna (Rs 10,000) and Hema Malini (negative wealth of Rs 42,000) at the bottom.
None of the income tax officers in Delhi, Madras and Bombay was willing to talk about the operation because of the “uproar the disclosure would cause”, as one of them put it. However, they admit that they encountered many hurdles in compiling the information. According to reports received by the Revenue Department, over a dozen film actors and distributors have not filed their income and wealth tax returns for the last three years and it was during this period that many of the most expensive films were made.
Incomplete task: Further, although the CBDT officials had completed their scrutiny of the available returns, their main task, to evaluate the amount of black money floating around, was nowhere near completion because the breakdown of the cost of the films – actors’ shares, director’s share and so on – was not available. It was reported to the CBDT that of the 2,216 feature films certified for exhibition from 1978 to 1981, 365 Hindi films cost at least Rs 25 lakh – but the producers’ income could not be assessed as half of them had not filed their returns in time. Also, the income tax officers could not furnish the returns of those producers whose films had cost over Rs 1 crore, over the last three years.
The commissioners of income tax in Bombay for circles Bombay City III and Bombay Central wrote to the CBDT saying that in their circles, only eight films cost over Rs 1 crore, including Satyam Shivam Sundaram (Rs 1.13 crore), Shaan (Rs 1.05) crore). Sargam (Rs 1.79 crore), Kala Patthar and Qurbani. Unfortunately, the commissioners have not yet given any information about the share of actors in the total cost of production. This would have undoubtedly helped the taxmen locate any sources of evasion or avoidance, and answer once and for all the crucial question of how much Bachchan gets for two hours of gruff-voiced drama on the screen.