How D Gukesh will end up paying more taxes than MS Dhoni's IPL salary after World Championship triumph

D Gukesh became a millionaire at the age of 18 after being crowned the youngest world champion in the history of chess last week. Gukesh achieved the incredible feat with his 7.5-6.5 victory over Ding Liren in the 2024 FIDE World Championship in Singapore, sealing the title with his 58-move victory over the Chinese Grandmaster on Thursday. Having won US$ 200,000 for each of his three victories in the ‘Best of 14 Games’ series to decide the champion, and the rest of the prize money getting equally split between the two players, Gukesh ended up pocketing a whopping US$1.35 million , or INR 11.45 crore.

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Gukesh, however, won’t take whom the entire amount, and will have to shell out a sizeable chunk of his prize money as taxes.

How much tax will Gukesh have to pay from his prize money?

The teen chess prodigy, who received a hero’s welcome at the Chennai International Airport on Monday following his emotional triumph in the World Championship in Singapore, will have to pay 39 to 42 per cent of his prize money as tax, as per Section 194B, Rule 26 of the Income Tax Act.

Prize money won in events such as the World Championship as well as winnings through other means such as lotteries is considered a taxable income. Individuals earning more than Rs 15 lakh annually are taxed at 30 per cent, while those earning over Rs 5 crore have to pay an additional charges, and are effectively taxed at over 42 per cent.

Gukesh thus might have to pay a tax of approximately Rs 4.67 crore – which is higher than former India and Chennai Super Kings captain MS Dhoni’s IPL salary. The 2011 ICC World Cup-winning captain had been retained by CSK as an ‘Uncapped Player’ ahead of this year’s mega auction in Jeddah.

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Gukesh, however, could get a marginal relief under the new tax regime, in which he might end up paying a 39 per cent tax instead of 42 per cent.

What will also make up for the tax deduction is the award of Rs 5 crore that Tamil Nadu Chief Minister MK Stalin has announced for Gukesh following his incredible feat in Singapore. Although this award won’t qualify for a tax exemption either, it certainly will help Gukesh recover a major portion of his earnings that will be going to the Central Government.