Diwali Bonus 2021 Revenue Tax Pointers: Acquired Money, Automotive or Gold from employer? Examine Tax Implications

diwali bonus 2021 income tax rules

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A lot of the corporations present Diwali Bonus to their workers. The Bonus is usually offered in money. Some corporations furthermore present Diwali Bonus in choice. Whereas it’s the worker’s prerogative to resolve on how one can spend or use the Diwali Bonus, you’ll have to concentrate on the earnings tax pointers that apply to the bonus offered by the employer. In an e-mail correspondence interplay with FE On-line, Dr Suresh Surana, Founder, RSM India, outlined the varied tax implications on Diwali Bonus acquired by workers from their employers. Excerpts:

What are the tax pointers that apply to Diwali Bonus?

As per the provisions of IT Act, Bonus acquired by an worker contained in the form of money shall be chargeable to tax beneath ‘Revenue from Wage’ and the equal might probably be subjected to tax in accordance with the slab bills.

How masses Diwali Bonus attraction to tax?

As acknowledged above, the whole quantity acquired as Diwali Bonus is probably taxable on the slab cost associated to the worker.

How masses tax an worker should pay if receiving Rs 1 lakh as a Diwali bonus?

The taxation of the bonus would depend on the Full Revenue of the Worker. The Diwali bonus might probably be taxable beneath the highest ‘Revenue from Wage’ and taxed on the slab bills associated to the taxpayer. Nonetheless, in opposition to such bonus, the taxpayer might probably be eligible to say Common deduction of wage, every completely different deduction and exemption relying on the character of earnings and investments.

ALSO READ | Know the way masses money you will take as reward with out paying tax (FAQ)

Will I’ve to pay tax if receiving the Diwali bonus in choice, and certainly not in money?

As per Rule 3(7)(iv) of the IT Pointers, if an worker receives a Diwali reward in choice (vouchers/hampers/token) and the combination worth of such choice is Rs. 5,000 or further in a FY, then the equal shall be matter to tax as a perquisite beneath the highest ‘Wage’. If, the combination quantity of choice is lower than Rs. 5,000, the equal is probably exempt from tax. It’s pertinent to notice that in case the brink is crossed, all the quantity acquired might probably be subjected to tax.

How masses tax will I’ve to pay if my company affords a gold coin or a car as a Diwali bonus?

The taxation tips on gold coin or car as Diwali bonus is as talked about above

ALSO READ | Revenue Tax on Diwali, Dhanteras 2021 pageant presents: Correct proper right here’s all it is vital know

Are there methods to avoid wasting a lot of a variety of tax on Diwali Bonus?

No there are not any particular tax deductions available on the market on bonus acquired, apart from the bounds as talked about above.

What are loads of the most effective methods by which one should make investments Diwali bonus?

In immediately’s date, there are fairly a couple of monetary devices the place an individual can Make investments his/her surplus funds. Among the many many hottest funding choices are as follows:

1. Authorities Bonds

2. Public Provident Fund

3. Pension Funds

4. Mutual Funds

5. Fairness Shares / Debentures / Worldwide Shares

Other than this, just a few varied components that a person should take into accounts are his/her hazard urge for meals, required cost of return, time horizon, availability of funds, transaction prices, and so forth. as a way to select the proper funding threat.

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