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Tax on Ipl Fee: Under the Income Tax Act, all players, whether domestic or foreign, have to pay income tax. Even on the huge earnings from IPL, the money goes into the player’s account only after paying tax and TDS.
IPL Auction: The auction of players for the Indian Premier League (IPL) to be held in the year 2026 was completed today on 16 December. In today’s auction, Kolkata Knight Riders i.e. KKR bought Australian player Cameron Green with the highest bid and offered him Rs 25.20 crore. Green has now become the most expensive foreign player. Last year, Lucknow Super Giant had created history by buying Rishabh Pant for Rs 27 crores. How much money do the players who are sold at such huge prices actually get and how much tax do they have to pay?
The huge amount received by IPL players in the auction does not go into their account in full, rather it is received after deducting tax just like your salary. Apart from this, they also have to pay income tax on their earnings as per the slab. In this way, the actual earnings of IPL players are much less than the amount they receive. One more thing to be known is that income tax rules apply differently to domestic and foreign players.
In which category does the income come?
First of all, let us tell you that the earnings of the players, which includes the salary received from BCCI and the auction price of IPL, is considered as professional income. Obviously, before paying this amount, BCCI and IPL franchises deduct TDS, which is 10 percent. This means that if Rishabh Pant was offered Rs 27 crore, the franchise would have paid him only after deducting 10 percent TDS i.e. Rs 2.70 crore.
How will the rules apply to Indian players?
You will be surprised to know that the provision of deducting 10 percent TDS on match fees or IPL auction amount is applicable only to Indian players. Under Section 194J of the Income Tax Act, 10 percent TDS is already deducted on their earnings. However, the final tax is calculated according to the player’s annual income and his slab. This income also includes IPL fees and earnings from advertisements.
How is tax calculated
If we look at the new tax regime itself, 30 percent tax is levied on earnings above Rs 24 lakh and most of the players fall in this slab. Surcharge of 10 to 37 percent is also imposed on high income. In this way the effective tax on IPL players becomes 38.42 percent. If we calculate tax only on Rs 27 crore received by Rishabh Pant, then first he paid TDS Rs 2.70 crore. Now tax of 38.42 percent on Rs 23.30 crore i.e. about Rs 8.95 crore. Now if we combine income tax and TDS, the total tax will be around Rs 11.70 crore.
