Some companies have recently gifted high end smart phones to their employees, while some have indulged their employees with an all expenses paid holiday. Any gift, which is given to an employee on an occasion, or which is given for exceptional performance or as an award may be taxable for the employee.
Just like a performance bonus which is fully taxable in the hands of the employee – gifts which are directly linked to employees performing ‘extremely well’ and received as awards are taxed too.
Do note that Gift made in cash or kind by the employer is exempt up to Rs 5,000. Gifts may be received by the employee or by a member of the employee’s family.
Gifts are taxed in the hands of the employee, unless – say in case of a smart phone – the company can appropriately display that there was a business need for these phones and these are provided in the normal course to help employees perform their usual work related duties.
Did you receive a gift from your Employer?
Published On - January 14, 2015
