Is IPL tax-free? Exploring BCCI’s tax exemptions

Table of Contents

BCCI’s tax-exempt status
Estimated revenue loss for the Indian government
Government’s stance and potential reforms

The Indian Premier League (IPL), one of the most lucrative cricket tournaments in the world, has been a topic of discussion when it comes to taxes. Many fans are surprised to learn that the Board of Control for Cricket in India (BCCI), which organizes the IPL, enjoys significant tax exemptions on its earnings from the tournament.

BCCI’s tax-exempt status

The BCCI is registered as a charitable organization under Section 12A of India’s Income Tax Act. This means they do not need to pay income tax on IPL earnings, as long as that money is used to further the objective of promoting cricket in the country.

In 2021, the Income Tax Appellate Tribunal (ITAT) issued an order reinforcing BCCI’s tax-exempt status, stating that even though the BCCI is earning money through hosting the IPL, the primary objective of promoting cricket remains intact.

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Estimated revenue loss for the Indian government

While the exact figures are not specified, the tax exemptions and benefits provided to the BCCI and IPL over the past five years have led to significant revenue losses for the government.

However, it’s important to note that services by way of admission to IPL events attract a 28% Goods and Services Tax (GST). During the financial years 2022-23 and 2023-24, the gross GST revenue collection from BCCI amounted to INR 2038.55 crores.

According to reports, at the end of current fiscal year, BCCI’s bank balance was INR 16,493.2 crore in various savings and current accounts and fixed deposits, up from INR 10,991.29 crore the previous year.

Government’s stance and potential reforms

The government has not proposed specific tax reforms for sports organizations like BCCI and IPL. However, there are ongoing discussions about balancing the growth of sports with fair tax contributions from such entities. The Income Tax Department has challenged BCCI’s tax exemption claims during assessment proceedings, but the matter is currently sub judice (under judicial consideration).