If we issue gift card to employees occasionally. how to treat this gift card amount?

Hi Team,

If we issue gift card (i.e.Amazon) to employees occasionally (i.e. festival, above and beyond, team excellent) how to treat this gift card amount?
Govardhan.

2 Likes

Up to Rs 4999 tax exempt.

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Thanks Mohan.
If we pay a gift card amount of more than 5000/-how to treat it in employee payroll?

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The excess over Rs 5k will be added as a taxable perquisite.

3 Likes

Dear Govardhana

Up to 5000/- you can account as gift and anything above you have add it back to other allowance and tax the same.

Thanks and Regards

Natarajan S

3 Likes

So anything above that will be taxed or the whole amount.

Example, if a gift is of INR 6000/- then the total 6000 will be taxed or only 1000.

Regards
Mohit

2 Likes

Hi Mohit,

The entire 6k gets taxed

3 Likes

Gifts or Vouchers within Rs 5,000 in a financial year are tax-free. If it crosses 5K then it will be treated as Perquisite and tax will be deducted from the employee.

Note: 5K limit is not for instance, It is cumulative value for the entire year.

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