India’s new world champion Gukesh Domraju returned to India on Monday. The young Indian chess grandmaster won the 2024 FIDE World
D. Gukesh, born in 2006, is an Indian chess prodigy who became the world’s youngest International Grandmaster (GM) at 12 years, 7 months, and 17 days old, breaking Sergey Karjakin’s record.
Achievements-
1. Youngest GM in history
2. Winner of numerous international tournaments
3. Represented India in Olympiads and World Championships
4. Achieved a FIDE rating of over 2700
Tax Calculation for D. Gukesh-
D. Gukesh’s tax payments depend on various factors:
1. Income Sources: Tournament prizes, endorsements, sponsorships, and coaching income.
2. Residence: India (tax laws and regulations apply).
3. Tax Slab: Income tax rates vary based on income brackets.
4. Deductions and Exemptions: Applicable tax deductions and exemptions.
D Gukesh’s prize money information
According to FIDE rules, each player gets $200,000 (approximately ₹1.68 crores) for winning each game. The remaining prize money is divided equally between the two competitors.
The Indian chess player won three games in the championship and is therefore likely to win $600,000, i.e. around ₹5.04 crores.
The remaining $1.5 million was divided equally between Gukesh and Ding, taking Gukesh’s total prize money to ₹11.34 crores (estimated amount).
Income Tax Rates in India (2022-2023)
1. Up to ₹2.5 lakhs: 0% (exempt)
2. ₹2.5 lakhs – ₹5 lakhs: 5%
3. ₹5 lakhs – ₹7.5 lakhs: 10%
4. ₹7.5 lakhs – ₹10 lakhs: 15%
5. ₹10 lakhs – ₹12.5 lakhs: 20%
6. ₹12.5 lakhs – ₹15 lakhs: 25%
7. Above ₹15 lakhs: 30%
Estimated Tax Liability
Assuming Gukesh’s annual income is around ₹50 lakhs (approximately $61,000 USD), his tax liability would be:
1. Taxable Income: ₹50 lakhs
2. Tax Rate: 20% ( ₹10 lakhs – ₹12.5 lakhs bracket)
3. Tax Liability: ₹10 lakhs (approximately $12,200 USD)
How much tax will Gukesh have to pay on the FIDE prize money?
According to Section 194B, Rule 26 of the Income Tax Act, the Indian chess player may have to pay around 39-42 per cent of his prize money as tax. According to this provision, deduction of tax at source (TDS) is mandatory on winnings from lotteries, crossword puzzles, card games and any other games. The chess champion may get some relief under the new tax regime.
