Team North West Consultancy (NWC) thanks all our clients and well-wishers and wishes you a happy and prosperous New Year. May the year ahead bring good health, happiness and growth to your home and business.
The Diwali season is also the season of gifts – to family, friends, employees and business associates. If you gave or received gifts this festive season, here are a few simple tax points worth keeping in mind.
Diwali Gifts: Key Tax & GST Points
1. Gifts received by individuals (Income Tax)
- Money or specified property received as gifts from persons other than relatives is taxable if the total value received during the year exceeds ₹50,000.
- Gifts from relatives (such as spouse, brother, sister, parents and their lineal ascendants/descendants, as defined in the law) are not taxable.
- Apart from marriage, no other occasion is exempt – so festival gifts from friends are counted towards the ₹50,000 limit.
2. Gifts by employers to employees (GST)
- As clarified by CBIC, gifts of value up to ₹50,000 per employee in a year are outside the scope of GST.
- Gifts above this value to an employee are treated as a supply under Schedule I of the CGST Act.
3. Input Tax Credit on gifts (GST)
- Under Section 17(5)(h) of the CGST Act, input tax credit is not available on goods given away as gifts or free samples.
- Businesses buying Diwali gift hampers should keep this in mind while booking GST on such purchases.
Tip: Keep a simple record of gifts given and received during the festive season – it makes year-end accounting and return filing easier.
Need Help?
For any query on Income Tax, GST, TDS, MCA, accounting or DSC, please contact us.
Office: 210, Vitthal The Mall, Koba Gandhinagar Road, Near Vishwakarma Engineering College, Ahmedabad, Gujarat – 382424
Raviraj Upadhyay (Partner): +91 90338 52145
Prashant Joshi (Partner): +91 97146 56484
Email: fca.raviraj@gmail.com
Official Sources
- Income Tax Department – Tax treatment of gifts received by an individual or HUF
- CBIC – Press release on gifts by employers to employees
- CBIC – Circular No. 92/11/2019-GST (gifts and free samples)
- CGST Act, 2017 – Schedule I
Disclaimer: This post is for general information only and should not be treated as professional advice. Please refer to the relevant law or consult us before taking any decision.
