Gift to employee's child

llllVICTORllll

Hello Victor,

Ans to your 1st part:-   According to the given senario, gift to Employees child cannot be recorded as business expenditure for the company. Because it is as good as Donation/ charity/ help etc.. The cash prize has nothing to do with Bussiness of the company. Its not an bussiness expenditure.

.Ans to your 2nd part :- It is an income to minor child but in the form of GIFT, hence it will come under the head Income From Other Sources. Being a Minor this income will be shown in the income statement of the Employee (Parent of that child). It will be exempt because Gift is BELOW  Rs. 50,000/-

U/S 10 of Income Tax Act.

If you still have some doubt feel free to ask.

Thank you