If the company decides to give gold coins to its select employees as part of a bonus or appreciation drive, then who would be taxed - the employee or the company? For example, Mr. X, for his good performance, is awarded 4 gold coins of 99.9% purity from HDFC Bank.
Now, if Mr. X decides not to sell the gold coins or convert them into jewelry, would the receipt of gold coins be taxed in his gross income from a tax point of view? If so, at what rate?
Taxation of Appreciation or Loyalty Bonus
Additionally, how would an appreciation or loyalty bonus be taxed for the employee, and how can they minimize the tax impact?
Please respond.
Much obliged,
Roshini Arya
From India, Jalandhar
Acknowledge(0)
Amend(0)
Now, if Mr. X decides not to sell the gold coins or convert them into jewelry, would the receipt of gold coins be taxed in his gross income from a tax point of view? If so, at what rate?
Taxation of Appreciation or Loyalty Bonus
Additionally, how would an appreciation or loyalty bonus be taxed for the employee, and how can they minimize the tax impact?
Please respond.
Much obliged,
Roshini Arya
From India, Jalandhar
Acknowledge(0)Amend(0)
If an employee shows that they received the gift from the company, then he/she can avail of the tax-free benefits if it is below ₹50,000; above ₹50,000 counts as taxable income. In the future, when he or she sells the gold, it will be considered a capital gain or loss, and the capital of the previous year will be counted based on the index number.
If an employee received gold against his bonus amount, then there are no questions; gold is equal to the bonus amount. Please confirm this with a finance/accounts expert.
Thank you,
Ashish
From India, Pune
Acknowledge(0)Amend(0)
176If an employee received gold against his bonus amount, then there are no questions; gold is equal to the bonus amount. Please confirm this with a finance/accounts expert.
Thank you,
Ashish
From India, Pune
Acknowledge(0)Amend(0)
Hi, If employee receive the gifts from the management (i.e. Dewali Gifts, New year gifts etc.,) that one is tax exempted as per Income Tax Act. Srini
From India, Hyderabad
Acknowledge(0)Amend(0)
From India, Hyderabad
Acknowledge(0)Amend(0)
Many thanks for your response. I just have an addition to be made. As you have correctly mentioned, a gift up to 50K is not taxable. Can the company, as per law, give a gift to the spouse of the employee or parent?
Gift Distribution to Family Members
XYZ Ltd wants to give a gift of Rs 150,000 to employee Mr. A for his good performance. Mr. A is an employee of XYZ Corp and receives a gift of Rs 50,000, which is tax-exempt. The wife of Mr. A, Mrs. A, is given a gift of Rs 50,000 (she is a housewife with no income and files NIL returns). Additionally, the parents of Mr. A are given a gift of Rs 50,000 (parents are senior citizens and also file NIL returns).
Will the tax authority have an issue with this? What will be the positive and negative aspects for the company XYZ Ltd? Please clarify, and I shall be much obliged.
Regards,
Roshini
From India, Jalandhar
Acknowledge(0)Amend(0)
Gift Distribution to Family Members
XYZ Ltd wants to give a gift of Rs 150,000 to employee Mr. A for his good performance. Mr. A is an employee of XYZ Corp and receives a gift of Rs 50,000, which is tax-exempt. The wife of Mr. A, Mrs. A, is given a gift of Rs 50,000 (she is a housewife with no income and files NIL returns). Additionally, the parents of Mr. A are given a gift of Rs 50,000 (parents are senior citizens and also file NIL returns).
Will the tax authority have an issue with this? What will be the positive and negative aspects for the company XYZ Ltd? Please clarify, and I shall be much obliged.
Regards,
Roshini
From India, Jalandhar
Acknowledge(0)Amend(0)CiteHR is an AI-augmented HR knowledge and collaboration platform, enabling HR professionals to solve real-world challenges, validate decisions, and stay ahead through collective intelligence and machine-enhanced guidance. Join Our Platform.
Employee Benefits.doc
Employee Benefits.zip