Allowance of gifts

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

31 October 2013 Sir,
I would like to know whether cash gifts paid by company to its employees is an allowable expenditure?
Also will the same be included in the income of employees as salary or perks.

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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02 November 2013 It will be the allowable business expenses as employee cost

In the hands of employee, cash gift is fully taxable, you can add as perks

CA Pallav Singhania

CA Pallav Singhania (Expert)
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02 November 2013 As per section, gift received from employer is not taxable if it is not exceeds Rs 5000/-...Any amount which is received beyond Rs.5000 is fully taxable..(i.e) whole amount is taxable....

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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02 November 2013 Hi Mr. Aryan

Exemption Rs.5000/- only available gift in kind or non cash or voucher. incase cash gift it is fully taxable, no exemption available

CA Pallav Singhania

CA Pallav Singhania (Expert)
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02 November 2013 Yes, I do agree with you..
Cash Gift is fully Taxable....

Querist : Anonymous

Querist : Anonymous (Querist)

02 November 2013 Sir,
Then we would have to deduct TDS also on the same.

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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02 November 2013 yes. need to add in the salary income and deduct the TDS u/s.192