Kind employers may offer gifts, but onus lies on employees to pay tax on it

It’s good to have a considerate employer who gives a bonus or gift for Diwali, but the onus of paying tax on the gifts lies on the employee. Gifts from an employer to employee is taxable as perquisites if their value is more than Rs 5,000. The Rs 5,000 limit is for an entire financial year. It means the total value of all gifts and bonuses should be below the threshold for them to be tax-free. “If the employer doesn’t deduct tax at source, the employee will need to declare the gift under the head “salaries” in the income tax return (ITR) form,” says Pr.....

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