Purchase of Sweet Box for Diwali

Gifts from employers to employees (including customized gifts) are exempt up to Rs. 5,000 per financial year. If the sum exceeds this limit, the whole amount is taxable as a "Gift under Perquisite Tax" as per Indian Income Tax law., regardless of customization.

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A Diwali sweet box costing ₹7,000 per employee is generally taxable as a perquisite in the employee’s hands. Under Rule 3(7)(iv) of the Income-tax Rules, gifts, vouchers or tokens from the employer are exempt only up to an aggregate of ₹5,000 in a financial year; the excess is taxable. Accordingly, if the employee has received no other employer gifts, vouchers or tokens in that year, ₹2,000 is taxable. Customisation does not by itself change the treatment.

This should be tracked with other employer gifts for the financial year and included in payroll perquisite valuation and TDS working. A workflow that captures each employee’s gift value helps apply the annual threshold consistently. Manual tracking across festive distributions is difficult; automation can reduce repetitive work while leaving valuation and tax decisions under professional control. At Jir AI, our 2,000+ AI agents and 650+ integrations streamline GST, ITR, TDS, TCS and other compliance workflows, helping reduce manual workload by up to 70%. WhatsApp us to explore this workflow: https://wa.me/message/3HVOZ7HIY4ESC1