IPL 2025: Taxation on salary contract for foreign vs Indian players

IPL Auction 2025: Many cricketers from India and abroad have secured contracts worth crores of rupees for the Indian Premier League (IPL 2025). Now the question is that Indian cricketers earning crores will pay income tax under the tax law of the country, but how will tax be levied on the income of foreign players.

IPL is considered to be the most attractive T20 cricket league in the world, in which players get a very expensive salary package. Different franchise teams of IPL leave no stone unturned in buying top players. In the recently held IPL auction, Rishabh Pant emerged as the most expensive player, who signed a contract with Lucknow Super Giants for a record fee of Rs 27 crore. By doing this, he has become the most expensive player in IPL history. Let us tell you how cricketers who get contracts worth crores in IPL will have to pay tax.

How will income tax be levied on earning crores

Income tax rules on the earnings of Indian and foreign players playing in the IPL vary, particularly according to their residential status and Indian tax laws applicable to income earned in India.

Residential status

Income tax is deducted on the earnings of Indian players from India and abroad under Indian law. But, foreign players playing in IPL are classified as non-residents for taxation. TDS is deducted on the earnings of cricketers playing in IPL, which is 10% for Indian players and 20% for foreign players. These players get the contract amount only after deducting TDS.

Players playing IPL have to first sign a triangular agreement with both BCCI and the franchise to receive the contract amount. If a franchise team fails to make the payment, BCCI will take steps to make the payment and deduct the appropriate amount from the franchise’s central revenue fund.

What do experts say

According to a Business Today report, chartered accountant Suresh Surana said that the amount paid by IPL franchise teams to players is considered as professional income. In such a situation, the earnings from IPL are added to their total income in a year and tax is deducted accordingly based on income tax slab rates.

What are the rules for foreign players

Non-Resident Indian (NRI) Sportspersons and Foreign Athletes Tax is deducted from foreign players under specific provisions of section 115BBA of the Income Tax Act, 1961. As per this section, a non-resident sportsperson (including athletes) who is not a citizen of India and a non-resident participates in any sport or game in India is subject to special taxation.

In addition, foreign sportspersons who participate in any sport, advertisement, write articles related to sports in newspapers, magazines or journals in India, are taxed at a flat rate of 20% on the income they earn. Also, when these sportspersons receive their income in India, 20% TDS (tax deduction at source) is applicable.

However, foreign players can also avail of the double taxation benefit if their country has such an agreement with India. Because, in such cases, they may not be subject to additional tax in their home country as well. In contrast, Indian IPL players are taxed as per their respective income tax slabs, with a normal tax rate of 30% on their earnings.

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