New Delhi44 minutes ago
10 franchises spent Rs 639.15 crore in the 2-day IPL mega auction in Jeddah, Saudi Arabia. 182 players were sold in the auction, out of which 62 are foreign players. Rishabh Pant became the most expensive player in history, he was bought by Lucknow Super Giants (LSG) for Rs 27 crore.
When players are auctioned, TDS is deducted from their auction amount. Here we are telling how much money the players who have been auctioned in IPL will get as compared to the auction money. How much money will go to the government treasury?
10% TDS on Indian players, 20% on foreigners
The Indian government imposes 10% tax on the salaries of Indian players. This tax is deducted by the IPL franchise as Tax Deducted at Source (TDS) before making the payment to the player. Whereas 20% tax is deducted on the salary of foreign players.
For example, if an Indian player’s salary is Rs 10 crore, the franchise will deduct Rs 1 crore as tax before paying the player. Whereas if the salary of a foreign player is Rs 10 crore, then the franchise deducts 20% tax. The TDS deducted by IPL team owners is deposited with the Government of India on behalf of the players.
The money received by Indian players from IPL is added to their total income.
The money that Indian players receive from the IPL team is taxable under the Income Tax Act, 1961. This amount is considered as income from other sources. This income is added to their total income and tax is levied as per the slab while filing income tax return. The deducted TDS gets adjusted.
There are different rules for tax on the money received by foreign players in IPL
Foreign players who are present in India for more than 182 days in a financial year are covered under the Indian Income Tax Law. In such cases, the money received from IPL teams is added to their total income and taxed as per the tax slab.
Foreign players who are not present in India for more than 182 days in a financial year are not taxed on their entire income as per Indian income tax laws. These cricketers are only subject to TDS under Section 194E of the Income Tax Act, 1961.
Rs 89.49 crore will go to the government’s treasury from IPL auction.
The TDS deducted by IPL team owners is deposited with the Government of India on behalf of the players. In this auction, 10 franchises have spent Rs 639.15 crore. In this, Rs 383.40 crore has been spent on Indian players and Rs 255.75 crore has been spent on foreign players.
According to 10% TDS, the total TDS of Indian players comes to Rs 38.34 crore. According to 20% TDS of foreign players, it is Rs 51.15 crore. That is, out of the amount given to the players in this auction, a total of Rs 89.49 crore will be deposited in the government treasury.
