According to the rules specified by Income Tax Act 1961, Indian players are charged 10% TDS(Tax Deducted at Source) on the total bid amount, while Foreign players are charged TDS(Tax Deducted at Source) @ 20%.
After deducting TDS(Tax Deducted at Source), the players should file their Income Tax Return (ITR) to pay tax on their net income.
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Though you might be shocked to know that The Board of Control for Cricket in India (BCCI) is not required to pay tax on the income generated through IPL.
| TAX | INDIAN PLAYERS | OVERSEAS PLAYERS |
| Taxability of IPL Earnings | Yes | Yes |
| TDS Rate @ | 10% | 20% |
| Deduction from Income | Allowed(to the extent of relevant expenses incurred in the pursuit of profession) | Not Allowed |
| Additional Tax To Be Paid | May be required. The amount would depend on the Net Income(after inclusion of non-IPL income & deduction of expenses) | NIL(if no other income has been earned in India during the financial year) |
| Filing of Income Tax Returns | Required | Not Required |
According to The Income Tax Appellate Tribunal (ITAT), the objective of BCCI is to promote cricket, and thus, their income shall remain exempt.
However, this exemption is valid only till BCCI uses the income generated in the promotion of cricket to satisfy its objective.
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According to the Income Tax Act, 1961 income earned by any non-resident sportsman is taxable under section 115BBA at the rate of 20 percent.
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Also as Sec 194J treats these services as “professional services”, the payer is required to deduct the tax at the rate of 10 percent at the time of payment if the amount exceeds Rs 30,000 during the year.
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Section 44ADA states the clauses of presumptive taxation.
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Also Read: How Many Foreigners Can Play In Ipl?
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