Every year, the Indian Premier League (IPL) makes a lot of money through auctions, sponsorships, tickets, broadcasting, and streaming rights, among other things. But, have you ever wondered how much money BCCI pays as taxes for IPL? Or is IPL tax free altogether? Let us find out.
Is IPL tax free?
To note, the IPL body does not pay any taxes for the cash rich league. In 2021, the Income Tax Appellate Tribunal (ITAT), in an appeal filed by the BCCI (Board of Control for Cricket in India), upheld the arguments of the sports body. It stated that even though it’s making money through the IPL, the objective of promoting cricket remains intact and hence its income should be exempt from tax. The decision came in a November 2, 2021 order by the tribunal.
So, as long as the IPL profits are used for the BCCI’s objective of promoting cricket, it is entitled to claim exemption, as per live law. But as far as players are concerned, income from IPL is taxable.
Why no tax for IPL?
In 2016-17, BCCI had approached the Mumbai bench of the Income Tax Appellate Tribunal against three show-cause notices issued by the revenue department to explain why the tax exemption that the BCCI enjoys under Section 12 A of the Income Tax Act, should not be revoked for generating income through the IPL
While rejecting the contention of the revenue department, the bench of judicial member Ravish Sood and vice president Pramod Kumar reportedly said, “On the face of it, merely because a sports tournament is structured in such a manner so as to make it more popular, resulting in it in more paying sponsorships and greater mobilisation of resources, the basic character of activity of popularising cricket is not lost.”
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