Tds on diwali gift

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Querist : Anonymous

Querist : Anonymous (Querist)

02 November 2015 Whether TDS is applicable on Diwali Gift Given in form of Account Payee Cheque

Amol S Joglekar

Amol S Joglekar (Expert)
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02 November 2015 to whom you are giving the gift?
Gift given to Employees is subject to TDS under salary.
If you are giving it to your customers. TDS per se is not applicable

(But be sure that it is not related to magnitude of sales, else it may amount to commission and then TDS provisions will get attracted)

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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02 November 2015 If the aggregate value of gift received by the employee from employer, during the previous year, does not exceeds Rs. 5,000/- then such Gift is not taxable in the hands of employee. If gift received during the previous year exceeds Rs. 5,000, then whole amount of gift received will be chargeable to tax.

Refer Rule 3 of Income tax Rules.

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Querist : Anonymous

Querist : Anonymous (Querist)

03 November 2015 Sirs,

you mean to say that there arises no tax liability to the payer.

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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03 November 2015 Yes, provided it does not cross the Rs 5000/- limit.

Querist : Anonymous

Querist : Anonymous (Querist)

03 November 2015 Sir
If the payer pays more than Rs 5,000/- what will be the implications