IPL Auction Money: How Are Cricketers Taxed in India?
The IPL 2025 auction created instant millionaires. Young Indian players, many uncapped, landed contracts worth ₹8 to ₹10 crore overnight. But here’s a question few fans ask:
“How is IPL income taxed?”
Do cricketers pay flat 30% tax? Can they claim deductions? Are they taxed like salaried employees or freelancers?
Let’s break it all down — in simple terms.
IPL Income Is Not Salary — It’s Professional Income
Cricketers are not employees of the BCCI or their IPL franchise. They are independent professionals providing services under a contract.
So, under the Income Tax Act, their earnings from IPL fall under:
“Income from Business or Profession” (Section 28)
This means they are taxed as per slab rates, usually hitting the 30% bracket. But the good news? They can also claim business expenses.
A Rough Tax Breakdown: ₹10 Crore Contract
Let’s assume a player is bought for ₹10 crore. Here’s a realistic income tax scenario:
Estimated Deductions:
| Expense Head | Amount (approx) |
|---|---|
| Agent/Manager Commission (10%) | ₹1,00,00,000 |
| Travel, Hotel, Fitness, Coaching | ₹25,00,000 |
| Equipment, Nutrition, Therapy | ₹5,00,000 |
| Total Deductible Expenses | ₹1,30,00,000 |
Tax Computation:
| Particulars | Amount (in ₹) |
|---|---|
| Gross IPL Income | 10,00,00,000 |
| Less: Business Expenses | 1,30,00,000 |
| Taxable Income | ₹8,70,00,000 |
| Income Tax @30% | 2,61,00,000 |
| Cess @4% | 10,44,000 |
| Total Tax Payable | ₹2,71,44,000 |
They also need to pay advance tax quarterly (June, Sept, Dec, March).
Can They Use Presumptive Taxation (44ADA)?
No. Section 44ADA (presumptive taxation for professionals) is not available to sportspersons.
Why?
Section 44ADA covers only notified professions like doctors, CAs, lawyers, architects, engineers, etc.
Sportspersons are not included in this list, so they must maintain books of accounts and pay tax on actual net income.
Foreign Players: How Are They Taxed?
Foreign players are also taxed in India on their IPL earnings. But:
- Tax is deducted at source (TDS) by the franchise
- Tax treaties (DTAA) with their home country may allow them to claim credit for this tax
- Most overseas players do not file ITR in India, but their income is subject to withholding tax
Example:
An Australian player earning ₹6 crore may have TDS @20-30% applied upfront and claim this tax in their Australian tax return.
What About GST?
- IPL match fees are not subject to GST.
- But endorsements, brand deals, paid appearances, influencer work — all attract 18% GST if income crosses ₹20L.
Players must:
- Register for GST (if applicable)
- Raise invoices for brands
- Pay GST regularly and file returns
Do Players File ITR-3?
Yes. Indian players earning IPL income must:
- Maintain books of accounts
- File ITR-3 as professionals
- Pay advance tax
- Keep proper bills and contracts
Failure to do so can lead to scrutiny, disallowances, and penalties.
Timeline of Payments
Players do not get paid lump sums. Instead:
- Payments are made in installments during the season
- Entire amount is usually paid by June or July of the playing year
- TDS is deducted on each payment
Summary: IPL Taxation in 5 Points
- IPL income is business/professional income, not salary
- Players pay tax as per slab — usually 30% + cess
- No presumptive taxation (44ADA) for cricketers
- Foreign players pay TDS, may claim refund in home country
- Indian players file ITR-3 and can claim professional expenses
Stay tuned to Stox N Tax as we decode taxes for not just cricketers, but professionals, freelancers, and salaried individuals too.
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