The Indian Premier League (IPL) continues to attract players with high-value contracts, making it one of the most lucrative T20 cricket leagues globally. In the latest IPL 2025 auction, Rishabh Pant secured a record-breaking ₹27 crore deal with Lucknow Super Giants, becoming the most expensive player in IPL history.
With such large earnings, both Indian and foreign players face taxation under different rules depending on their residential status and the Indian tax system.
How Indian cricketers pay tax on IPL income
Indian cricketers are taxed under Indian income tax laws, where their IPL earnings are treated as professional income. The tax is calculated based on their annual income under the income tax slab rates applicable to individuals.
Key details for Indian players:
- TDS Rate: 10% deducted at the source from IPL payments.
- Total Tax: Added to the player’s yearly income and taxed as per income slabs.
- Professional Income: Payments from franchises are categorized as professional fees.
Players sign a triangular agreement involving the BCCI and their franchise. This ensures that if a franchise cannot pay the player, the BCCI deducts the amount from the franchise’s Central Revenue Fund and ensures payment to the cricketer.
Tax rules for foreign IPL players
Foreign players participating in IPL are classified as non-residents under Indian tax laws. Their earnings in India are taxed under Section 115BBA of the Income Tax Act, 1961, which covers non-resident sportspersons.
Tax details for foreign players:
- TDS Rate: 20% deducted at the source from IPL payments.
- Flat Taxation: Income is taxed at a flat rate of 20%.
- Advertising and Writing Income: Foreign players who endorse products or write sports-related articles in India also face a 20% tax rate.
Double taxation benefit for foreign players
Foreign players may be eligible for double taxation avoidance agreements (DTAA) if their home country has an agreement with India. This prevents them from paying additional tax in their home country on the income earned in India.
For example:
- If a foreign player pays 20% tax in India under Indian laws, they may not have to pay extra tax in their home country if DTAA provisions apply.
Why Indian players are still at an advantage
While Indian players are taxed as per regular income slabs (up to 30% for higher income brackets), they enjoy certain advantages:
- Lower upfront deductions: Indian players face only 10% TDS compared to 20% for foreign players.
- Ease of tax management: They do not have to navigate international tax treaties or claim refunds.
Experts weigh in
Tax experts emphasize that IPL income is treated as professional earnings, ensuring fair taxation under Indian laws. Chartered Accountant Suresh Surana explains that TDS deductions ensure compliance, and the overall tax liability is calculated based on the player’s annual income.
For foreign players, the flat 20% rate simplifies taxation, while DTAAs provide relief from double taxation, making India’s system balanced and attractive for international talent.
