Gifts, vouchers, or bonuses received from employers during Diwali, and Christmas will not be taxed if the aggregate amount does not exceed Rs 5,000.
Income Tax Return Latest Update: Diwali festival which concluded this week was all about exchange of gifts among employees and friends, office colleagues, business clients and family members. During the festival, companies also give gifts to employees. However, did you know about tax implications on gifts you received from your boss? Taxes are the last thing on your mind while receiving or giving a gift. You must remember that certain gifts may be taxable in the hands of the receiver. As peer the Section 56 of the I-T Act, the law has provisions related to the taxability of gifts.
The taxpayers must note that the gifts received from family members and relatives are exempt from tax and are not taxable. There is no limit on how much you can receive from your family members!
Gifts received from friends, business relations and employers are taxable. Gifts in cash or kind more than Rs 50,000 would attract tax in the hands of the receiver. Moreover, gifts in excess of the Fair Market Value of the gift over the consideration if any paid would be regarded as a taxable gift if such difference is in excess of Rs 50,000.
According to Income Tax laws, the gifts of certain valuable assets are termed as ‘movable property’. It means shares, securities, jewellery, archaeological collections, drawings, paintings, sculptures, any work of art, bullion and virtual digital assets and are taxable.
Gifts, vouchers, or bonuses received from employers during festive occasions such as Diwali, and Christmas will not be taxed if the aggregate amount of these gifts during a financial year does not exceed Rs 5,000. However, if the amount exceeds the threshold value of Rs.5,000, the gifts will be taxed under the head ‘income from salary’ as per your tax bracket.
Source: https://www.india.com/business/income-tax-return-do-you-have-pay-tax-for-diwali-gifts-heres-what-rules-say-5709207/
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