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Prize from employer - taxable or not

Anuja (-) (141 Points)

30 October 2014

If a company conducts a speech competition in which all employees and outsourced workers are invited to participate. Prize distributed in cash in such case will be taxable in hands of employee or not ?

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7 Replies

SAURABH NENE (Chartered Accountant) (226 Points)
Replied 30 October 2014

In my opinion it will be taxable in hands of employees under the head income from other sources. Gifts, Awards, Prizes etc are taxable except when awarded by specified institutions or by Govt.

Mihir (Wealth Manager) (5293 Points)
Replied 30 October 2014

Yes, the prize money will be taxable and TDS too might be deducted.

Anuja (-) (141 Points)
Replied 30 October 2014

Is employer responsible for deduction of TDS from Salary of employees for such prizes or employees should themselves show it in their personal income tax return as other sources income.

SAURABH NENE (Chartered Accountant) (226 Points)
Replied 30 October 2014

Employer is not under obligation to deduct the tax. But employer should also consider income from other sources and house property as declared by the employee while deducting the tax. Here as he employer is aware of the income receivd by employees by way of prizes, hence to be on safer side employer should deduct the tax.