Diwali gift or Bonus. Taxable?

RECEIVED A DIWALI GIFT OR BONUS FROM OFFICE? FIND OUT IF IT IS TAXABLE Although the Gift Tax Act was abolished in 1998, all gifts you receive during Diwali or any other festival may not be tax exempt. Not only do you have to declare all gifts while filing your income tax return (ITR), you may also have to shell out income tax on gifts according to your tax slab. It is important to understand which gifts are taxed and which are not. Besides, there are separate income tax rules governing Diwali gifts or bonus received from your employer, says tax expert Homi Mistry, partner, Deloitte India. Diwali gift or Diwali bonus from employer: If you receive any gift voucher or token worth more than Rs 5,000 from your employer on any ceremonial occasion like Diwali or New Year, then it is treated as part of your salary and taxed according to your tax slab. The tax exemption is limited to gift vouchers or tokens totalling less than Rs 5,000 in any given financial year. Therefore, if you receive two vouchers totalling more than Rs 5,000 during a financial year then you will be taxed. There is no tax exemption on cash given as a gift by an employer. Mistry points out that even if you get Rs 2,000 cash from your employer, it is taxable as income from salary. READ MORE AT www.starhealthdevarajan.com/news/642 for Insurance related services, U can always contact Devarajan 9840177017 https://www.facebook.com/mediclaimagent/