Every year, the Indian Premier League (IPL) generates substantial revenue through auctions, sponsorships, ticket sales, and broadcasting and streaming rights. But have you ever wondered how much tax the BCCI (Board of Control for Cricket in India) pays for the IPL? Or is the IPL exempt from taxes? Let’s explore.
Is the IPL Tax-Free?
Yes, the IPL is exempt from taxes. In 2021, the Income Tax Appellate Tribunal (ITAT) upheld the BCCI’s argument that while it earns revenue through the IPL, the primary objective of promoting cricket remains unchanged. This ruling allowed the BCCI to claim tax exemption for IPL income, as long as it is used to further the promotion of cricket. The decision was part of an order passed on November 2, 2021.
Why is There No Tax on the IPL?
In 2016-17, the BCCI faced three show-cause notices from the revenue department questioning why the tax exemption under Section 12A of the Income Tax Act should not be revoked due to IPL-generated income. The Mumbai bench of the ITAT, led by judicial member Ravish Sood and vice president Pramod Kumar, rejected the department’s argument. The tribunal stated that making a sports tournament more popular and attracting higher sponsorships does not alter its fundamental purpose of promoting cricket.
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Tax on IPL Players
While the BCCI enjoys tax exemptions for IPL income, the earnings of players participating in the IPL are taxable.