Valuation of perquisite in respect of gift, voucher or token

Mostly by every employee additional benefits along with the normal salary is received in kind from the employer free of cost or at a concessional rate which is known as Perquisites (also known as perks). Gift received from the employer is one of the perquisites. Valuation of this perquisite i.e., perquisite in respect of the value of any gift, or voucher, or token as per Income Tax Act, 1961 is provided under.

The value of any gift, or voucher, or token in lieu of which such gift may be received by the employee or by member of his household on ceremonial occasions or otherwise from the employer, shall be determined as the sum equal to the amount of such gift. The perquisite is taxable. Where, however, the value of such gift, voucher, or token, as the case may be, is below Rs. 5,000 in the aggregate during the previous year, the value of perquisites shall be taken as Nil.

The following points should be noted –

1. Gifts made in cash or convertible into money (like gift cheques) are not exempt.
2. Gifts upto Rs. 5,000 in aggregate per annum would be exempt, beyond which it would be taxable.

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