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

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1

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.

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2

Up to Rs 4999 tax exempt.

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3

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

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4

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

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5

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

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6

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

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7

Hi Mohit,

The entire 6k gets taxed

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8

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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9

Only Excess amount will be taxed. in this case 5000 exemption and 1000 will be a taxable amount

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10

What if the employee though out the year win award and gets multiple amazon vouchers more than 5000. How are we supposed to tax the same.

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11

Once the gift amount exceeds Rs.4,999/-, the entire amount of gift would be taxable.

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12

Yes, if any gift amount exceeds Rs.5000 then it will be taxable as a Gift perk.

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