As was already being widely discussed before the Indian Premier League mini auction, Matheesha Pathirana, the young Sri Lankan pace sensation known as Junior Lasith Malinga, would receive a substantial sum. And he was successful in securing it.
Matheesha Pathirana joined KKR for another record fee
Kolkata Knight Riders (KKR), already sitting on a substantial amount of cash, managed to acquire Pathirana, paying a hefty sum of ₹18 crore. Pathirana, in fact, managed to get much more than expected. But with a substantial sum, a significant amount of taxes will also have to be paid. Let’s find out how much money the young pacer will actually receive in his account after paying all the taxes when he returns to his country.
This applies to a direct 20 percent tax under sections 111BA and 194E of the Income Tax Act. Additionally, a 4 percent cess is also levied for health and education. Therefore, Pathirana will have to pay approximately 20.8 percent tax. This amount amounts to ₹3 crore, 74 lakh, and 40 thousand. After deducting the tax from the auction proceeds, Pathirana will receive ₹14 crore, 25 lakh, and 60 thousand in Indian currency.
Pathirana will already pay a 20.8 percent tax in India before leaving for Sri Lanka. Sri Lanka taxes foreign earnings, typically at 15 percent. However, Sri Lanka doesn’t have a dual tax system on earnings in India. This means Pathirana will be in luck, receiving tax exemptions on his Indian earnings. Pathirana will receive ₹48.47 crore in Sri Lankan rupees, thus avoiding the 15 percent tax in his home country. The young pacer will receive approximately ₹48.47 crore in his home currency, a significant sum in his pocket and enough to make him an even bigger hero in his home country.
Taxes are mandatory and the highest in India. Sri Lanka generally avoids double taxation because taxes are deposited abroad. Therefore, based on the ₹18 crore received in India, Pathirana will receive ₹484.7 million in Sri Lanka.