Indian Premier League i.e. IPL is one of the most expensive and popular cricket leagues in the world. Every year crores of rupees are bid on indian and foreign players. But have you ever wondered whether cricketers get the full amount they get from IPL? Or do they have to pay tax on this income? Let us tell you the answer to this question, do cricketers really not pay tax on IPL money, what are the rules regarding this.
How is tax deducted?
In india, it is mandatory to pay income tax on every kind of income and IPL earnings are also no different from this. Whether the player is indian or foreign, he has to pay tax on his earnings. In IPL, the amount received by the players from the franchise is considered as 'professional income'. This amount is added to their annual income and then tax is deducted according to the applicable tax slab.
Tax rules for indian players
Indian players have to pay tax on IPL earnings under the Income Tax Act, 1961. When players are auctioned for IPL, TDS is deducted from their auction amount. The government of india imposes 10 percent tax on the salary of indian players. This tax is deducted by the IPL franchise in the form of TDS before making payment to the player. At the same time, 20 percent tax is deducted on the salary of foreign players.
How is tax deducted?
For example, if a player's salary is Rs 10 crore, then the franchise will deduct Rs 1 crore as tax before making payment to the player. Whereas if the player is foreign, then it is Rs 2 crore. The deducted TDS is deposited with the government of india on behalf of the players.
TDS rule
In IPL, the franchise deducts 10% Tax Deduction at Source (TDS) before making payment to the players. Some franchises make half the payment before the season starts, the rest after the season ends. bcci ensures that players get full payment.
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