In this paper we present an experiment on the use of the hierarchical Indic Languages POS Tagset (IL-POSTS) (Baskaran et al 2008 a&b) , developed by Microsoft Research India (MSRI) for tagging Indian languages, for annotating Sanskrit corpus. Sanskrit is a language with richer morphology and relatively free word-order. The authors have included and excluded certain tags according to the requirements of the Sanskrit data. A revision to the annotation guidelines done for IL-POSTS is also presented. The authors also present an experiment of training the tagger at MSRI and documenting the results.