Income Tax Department will send notice if Diwali bonus exceeds this amount

Diwali Bonus: Diwali is approaching. Many people receive a Diwali bonus during this time. This raises the question of whether Diwali bonuses are taxable. Let’s explore the income tax rules.

Diwali Bonus: As Diwali approaches, many employees wonder how much bonus they will receive this year. Some companies offer cash bonuses, while others offer gifts like sweets, clothes, electronic goods, or gift vouchers. But did you know that these Diwali bonuses and gifts are taxable? Many people think that gifts received during festivals are tax-free, but in reality, they are also subject to tax rules. Let’s find out whether Diwali bonuses and gifts are taxable.

By understanding the rules regarding Diwali gifts, you can accurately estimate your bonuses and gifts. This will prevent any mistakes in ITR filing, and most importantly, you can enjoy the joys of Diwali without any tax.

Are Diwali gifts tax-free?

According to media reports, not all Diwali gifts are tax-free. Small gifts, such as a box of sweets, clothing, or electronic gadgets worth up to ₹5,000, are generally tax-free. However, gifts above ₹5,000, such as high-end electronics, jewelry, or high-value vouchers, are fully taxable. The total value of these gifts is added to your annual income and taxed like regular salary income.

According to tax experts, a Diwali bonus of more than Rs 5,000 is taxable. Therefore, this bonus must be added to your income. Failure to report a Diwali bonus of more than Rs 5,000 could create problems for you. You could even receive an income tax notice.

Cash bonuses will be taxed

Experts say that if you receive a cash bonus from your company on Diwali, it will be considered part of your salary and subject to tax. This can be easily understood with an example. Suppose you receive a bonus of Rs 30,000 on Diwali. This will be added to your annual income and taxed according to your income tax slab. Cash bonuses received on Diwali are not tax exempt.

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The post Income Tax Department will send notice if Diwali bonus exceeds this amount first appeared on informalnewz.

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