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The recent triumph of 18-year-old Indian chess prodigy D Gukesh at the World Chess Championship has not only etched his name in history as the youngest-ever champion but has also brought into sharp focus the significant financial implications of his success. His total winnings, estimated at a staggering ₹11.34 crore, will result in a hefty income tax liability of ₹4.67 crore. This amount surpasses the entire IPL salary of cricket icon MS Dhoni for the upcoming 2025 season, which is reportedly around ₹4 crore. This stark contrast highlights the complexities of India's tax system and the substantial financial burden placed upon high-income earners, particularly those in the high-income brackets facing a top marginal tax rate exceeding 42%. Gukesh's victory, achieved against China's Ding Liren in a thrilling final in Singapore, catapulted him to international recognition. This young chess master's journey underscores the immense talent and dedication required to reach the pinnacle of professional chess, a field often overshadowed by the more commercially lucrative sports like cricket.
The composition of Gukesh's earnings further illustrates the financial complexities involved. ₹5.04 crore of his total winnings stemmed from his three match victories, while the remainder was distributed from the total prize pool of ₹21 crore, following FIDE regulations. The significant tax burden stems from India's progressive tax system, which applies a 30% tax rate on incomes above ₹15 lakh. For those earning over ₹5 crore, however, an additional surcharge of up to 37%, coupled with a 4% health and education cess, significantly increases the effective tax rate. This results in high-income earners, like Gukesh, facing effective tax rates exceeding 42%. This aspect of India's tax structure is often debated, with arguments centered around its impact on high-achievers and potential disincentives to earning higher incomes. The case of Gukesh serves as a compelling illustration of this debate, showcasing the potential for significant tax liabilities even for those whose earnings are earned through exceptional skill and talent.
Despite the substantial tax implications, Gukesh's perspective on his newfound wealth offers a refreshing contrast to the often-materialistic views associated with high-profile athletes. When questioned about his status as a multi-millionaire, he emphasized that his primary motivation for playing chess has always been passion and perseverance, not financial gain. He eloquently articulated the profound impact of his success on his family's financial well-being, stating that his parents previously faced considerable financial and emotional hardships. Now, he says, his earnings allow his family a level of financial comfort that they previously lacked. This emphasizes the human element behind the headlines and the significant positive impact Gukesh's achievement has had on his loved ones. His humility and focus on his craft rather than the financial rewards serves as an inspiring counterpoint to the often-commercialized nature of professional sports and highlights the values and personal growth that are cultivated through years of hard work and dedication.
The contrast between Gukesh's tax burden and MS Dhoni's IPL salary further underscores the disparity between different professional sports in India. While cricket enjoys significantly greater commercial success and higher player salaries, the tax system impacts high-earners in all fields. This disparity raises broader questions about the equitable distribution of wealth generated within the sports industry and the role that government policies play in incentivizing both athletic performance and broader economic growth. The case of Gukesh could potentially spark further discussions on tax reforms and the need to consider the contributions and sacrifices made by talented individuals in various professional fields, particularly those with significantly shorter professional lifespans than in more traditional occupations. Furthermore, it raises the point of whether current tax structures sufficiently incentivize younger generations to pursue excellence in fields that may not have the same immediate financial rewards as others, and the ethical implications of the current tax system for younger, high-achieving individuals.
Source: World chess champion D Gukesh to pay more taxes than MS Dhoni's current IPL salary