How much tax do cricketers pay on luxury gifts like cars? Know the rules

Cricketers in India often receive luxury gits such as cars, bikes, or other high-value items in recognition of their performance or for winning tournaments. A recent example is Indian opener Abhishek Sharma, who was named Player of the Tournament in the 2025 Asia Cup. He was gifted a luxury Haval H9 car for his exceptional performances, spanning from the start of the tournament to the final. While such gifts are a mark of appreciation, they are not completely tax-free under Indian Income Tax laws.

Taxability under Income Tax rules

Income Tax rules clearly state that gifts received from non-relatives are taxable at their market value. According to the Income Tax Act, 1961, if an individual receives a gift from a company, brand, industrialist, fan, or any non-relative, the current market value of the gift is added to the person’s taxable income. This rule applies to cars, bikes, and other luxury items. However, gifts from close relatives, such as parents, siblings, or a spouse, are exempt from tax.

Tax Rates

Since many cricketers fall in the highest tax bracket of 30 percent, the value of the gift is added to their income and taxed accordingly. Additionally, a four per cent health and education cess is also levied, making the effective tax rate approximately 31.2 per cent. For example, if a cricketer receives a car worth INR 20 lakh, the tax liability on the gift would be around INR 6.24 lakh (approx.). This means that even though the car is gifted by someone else, the receiver of such gift is responsible for paying the tax.

It is essential for cricketers and fans alike to understand that while receiving lavish gifts. The market value of the gift becomes part of taxable income, emphasising the importance of proper tax planning and compliance. Luxury items, though rewarding, are not entirely free when it comes to taxation.