The Indian Government announced the Union Budget for the 2025-26 calendar year on February 1. One of the many clauses which was revealed was the tax reforms benefitting the middle-class taxpayers.

The Finance Minister, Nirmala Sitharaman, came out and announced the elimination of income tax for individuals earning up to INR 12 lakh per annum. This was indeed a well-received initiative for salaried professionals.

However, the amendments to the income tax policy don't seem to have added any benefits to lucratively-contracted individuals, including many of the high-profile cricketers.

As far as Indian cricketers are concerned, most of them are taxed at the topmost slab. This is due to the hefty sum of money earned via contracts while playing in the Indian Premier League (IPL), match fees, and well-compensated brand endorsements. Hence, there comes the responsibility of effective financial planning. Through clever strategising of the various benefits in place, net earnings could be maximised in the most effective manner possible.

Let's look at 5 tax strategies cricketers use to maximise earnings

1. Tax Planning & Investments

Cricketers invest in tax-saving instruments like ELSS (Equity-Linked Savings Scheme), PPF (Public Provident Fund), and NPS (National Pension System) to reduce taxable income. They also diversify their portfolio into real estate, mutual funds, and startups for longer duration since there is less tax liabilities on the LTCG (Long-term Capital Gains).

2. Foreign Income & Double Taxation

Indian cricketers earning from international leagues and tournaments like the IPL and the County Championship make use of DTAA (Double Taxation Avoidance Agreement) to avoid paying taxes in both countries, hence limiting their expenditure by a sizeable amount.

3. Business Ventures & Corporate Tax Benefits

Many Indian cricketers also set up companies or LLPs (Limited Liability Partnerships) for their brand endorsements, allowing them to pay only corporate tax. The magnitude of corporate tax to be paid is significantly lower than the amount to be paid in the form of personal income tax.

Indian ace batter, Virat Kohli, and ex-World Cup-winning skipper, MS Dhoni, own businesses under separate entities, while benefiting from lower corporate tax rates.

4. HUF (Hindu Undivided Family) Accounts & Trusts

Some players transfer the assets (tangible and intangible) to HUF (Hindu Undivided Family) accounts or family trusts to optimize tax liabilities and maximise long-term financial gains.

5. Luxury Tax & GST (Goods & Services Tax) Compliance

Nowadays, there are a lot of cricketers who are directly or indirectly involved in the hospitality sector, being owners or part-owners of sports academies, or merchandising their own product lines. They ensure the GST (Goods & Services Tax) compliance to reduce burdens related to indirect tax.