Olympics 2024: Are the rewards given to Indian medalists tax-free?

The Indian athletes have returned with as many as six medals from the Paris Olympics.

Manu Bhaker, Sarabjot Singh, Swapnil Kusale, Neeraj Chopra, Aman Sehrawat and the Indian Hockey team brought the medals home.

These athletes are honoured with substantial cash prizes, gifts, and various rewards by the government and private sector.

As these athletes are felicitated, one question arises: Are these rewards and cash prizes subject to taxes?

What the law states

According to the 2014 notification from the Central Bureau of Taxes (CBT), rewards given to medalists from the central or state governments for the Olympics, Commonwealth Games, or Asian Games are exempt under Section 10 (17A) of the Income-Tax Act.

Manu Bhaker, who won bronze in the women's 10m air pistol and mixed team 10m air pistol events respectively, has reportedly received a cash prize of Rs. 30 lakh and her mixed team partner Sarabjot Singh has received a cash prize of Rs. 22.5 lakh under the reward scheme of Ministry of Youth Affairs and Sports, will likely to be exempted from taxes.

Similarly, the rewards given to the Indian hockey team by the Punjab and Odisha state governments will also likely be tax-free.

It is important to note that while medals are valuable, they are not considered "jewellery" as per the Income-Tax Act.

Section 56(2)(x) of the Act outlines that movable property, including land, buildings, shares, securities, and jewellery, is taxable if it is received without consideration and exceeds ₹50,000 in value.

Since medals are not specified as jewellery, they do not fall under this category and will therefore be outside the purview of this article.