Hyderabad: Indian Grandmaster D Gukesh made the whole nation proud by becoming the youngest World Chess Champion beating Ding Liren in the title clash held in Singapore on Thursday. The youngster was praised by many as he became only the second Indian after Viswanathan Anand to clinch the world title. However, after the victory, many netizens raised concerns over the substantial amount of money being deduced from his prize as income tax.
D Gukesh’s Prize Money
The new world chess champion is reported to have earned around ₹11 Crores after his victory in the World Chess Championship final. The tournament featured a pool prize of 21 Crore rupees. According to the regulations of the FIDE, players are awarded around Rs 1.68 crores for each victory while the remaining amount to be distributed equally between both the rivals. The Indian GrandMaster secured three victories and earned ₹5.04 Crores.
Ding Liren claimed two triumphs and earned 3.36 crores. The remainder of the prize money was equally distributed between the finalists which took the tally of Gukesh’s earnings to 11.34 crores.
Taxes to be deducted
Notably, D Gukesh will have to pay more amount in taxes than MS Dhoni’s IPL salary. As his income is above ₹10 Lakhs, he will be subjected to a 30% tax rate. Further, individuals with an income of more than 5 Crore rupees are subject to an additional tax of up to 37% along with 4% levy for health and education.
“As per Section 194B, Rule 26 of the Income Tax Act provision mandates the deduction of tax at source (TDS) on winnings from lotteries, crossword puzzles, TV shows, card games and other games of any sort. Winning a game of chess also requires Ta DS deduction of up to 42.744% based on the amount of winning. There are no deductions allowed underthe Income tax act against such Income. The rates are significantly high in comparison to the USA where maximum rates are 37% on winnings from games,” renowned Tax Expert Yogendra Kapoor told ETV Bharat.
So, Gukesh will have to pay an amount of 4.67 Crore in taxes which is even more than MS Dhoni’s IPL salary for the next season which is ₹4 Crores.
