If a company pays Rs 5000/- via interbank transfer to all employees on occasion of Diwali. What is the tax treatment in hands of employee? What if employee submits the bill of purchase of gift worth Rs 5000/- ?
If a company pays Rs 5000/- via interbank transfer to all employees on occasion of Diwali. What is the tax treatment in hands of employee? What if employee submits the bill of purchase of gift worth Rs 5000/- ?
1.Gifts in cash or which are convertible into cash or gift in the form of cheques received by the employee from the employer on social and religious occassions are fully taxable in the hands of the employee.
2.If the employee submits the bill of purchase of gift of Rs.5000 then it will be treated as reimbursement by the employer and it is neither an income nor an expense for the employee.
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