This case of 15-year-old Indian cricket player Vaibhav Sooryavanshi earning a whopping Rs 7 crore from his cricket, his IPL contract, and his endorsements, sponsorships and prize money is an important exception to the rule of clubbing minor income. This is because all of the above income is taxed in the minor’s hands alone. This is because all the income of such minor is earned by reason of his own skill, talent and even specialized knowledge where he is a minor. This discussion will also cover the Tax Calculation on Vaibhav Sooryavanshi Earning.
Illustrative Tax Calculation (Old Tax Regime Assumption)
Understanding Tax Calculation on Vaibhav Sooryavanshi Earning
Assuming:
Taxable income = ₹7,00,00,000
No deductions claimed
Income taxed under normal slab rates
Age below 60 years
| Particulars | Amount (₹) |
|---|---|
| Tax on income above ₹15 lakh @ 30% | 2,05,50,000 |
| Tax on first ₹15 lakh (slab-wise) | 1,50,000 |
| Total Income Tax | 2,07,00,000 |
| Surcharge @ 25% (income above ₹5 crore) | 51,75,000 |
| Tax + Surcharge | 2,58,75,000 |
| Health & Education Cess @ 4% | 10,35,000 |
| Total Tax Liability | ₹2,69,10,000 |
Important Caveats
The actual tax may differ because:
7 Crores is an estimate to arrive at his Net worth and NOT his taxable income.
Income could include:
- IPL salary
- Match fees
- Endorsement income
- Prize money
- Gifts (cars, awards, etc.)
Also note that the actual tax liability would reduce as you add the business expenses and professional deductions to reduce your taxable income.
Tax is charged differently depending on whether the income is reported as business income or salary or otherwise.
Example Based on IPL Earnings Only
The earnings of 19-year old cricketer through IPL have been detailed out in another report. The young player has earned around ₹2.5 crore from retainer fees, match fees and awards received by him.
On ₹2.5 crore taxable income:
Income tax = ₹72 lakh
Surcharge @ 15% = ₹10.8 lakh
Cess @ 4% = ₹3.3 lakh
Total tax = ₹86 lakh
Hence if entire of ₹7 crores are taxable then tax amount would be approximately ₹2.69 crores but if only ₹2.5 crores are taxable then liability would approximately be ₹86 lakhs.
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