CA SANJAY MUKHERJEE
( Expert )
13 October 2009
Circular No 15 dataed 12.12.2001 says
"Gift, voucher or token in lieu of gift - It is customary in India, as it is in other parts of the world, to provide presents directly or indirectly in the form of vouchers or tokens to employees on social and religious occasions like Diwali, Christmas, New Year, the anniversary of the organization etc. Such gifts upto Rs. 5,000 in the aggregate per annum would be exempt, beyond which it would be taxed as a perquisite. However, gifts made in cash or convertible into cash, like gift cheques etc. do not fall in the purview of this sub-rule."
So amount exceeding 5000 is taxable except cash gift which is fully taxable.