--- title: "Diwali Bonus and Gifts in 2026: What Is Taxable, and the New ₹15,000 Gift Limit" url: https://www.anukram.in/blog/diwali-bonus-gifts-tax-2026.html description: "Diwali 2026 is on 8 November. Is your bonus taxable? Employer gifts are tax-free up to ₹15,000 a year under the Income-tax Rules 2026 (earlier ₹5,000). Rules for employees and employers, with TDS and GST." updated: 2026-10-04 source: Anukram, Hyderabad (anukram.in) license: Free to read, quote and cite with a link to anukram.in. General information, not professional advice. --- [Home](https://www.anukram.in/) › [Blog](https://www.anukram.in/blog/) › Diwali Bonus & Gifts Tax 2026 # Diwali Bonus and Gifts in 2026: What Is Taxable, and the New ₹15,000 Gift Limit By [Anurag](https://www.anukram.in/about.html) · Anukram, Hyderabad · Published 4 October 2026 [Image: Diwali diyas, marigolds, a gift box, an envelope with coins and a calculator on a desk] **Diwali 2026 falls on Sunday, 8 November** (Dhanteras on 6 November). It also falls in **Tax Year 2026-27**, the first year under the new Income-tax Act, 2025. That matters for gifts: **the tax-free limit for employer gifts has gone up from ₹5,000 to ₹15,000**. Most articles you will find online still quote the old number. **The short version:** cash bonus is always taxable. Gifts and vouchers from your employer are tax-free while the year's total stays under **₹15,000**. Gifts from outsiders are taxable only above **₹50,000** a year. ## What is taxable and what is not | Item | Tax treatment (2026) | | --- | --- | | Diwali cash bonus from employer | **Taxable** as salary. TDS applies. | | Gift, hamper or voucher from employer | Nil value if the total for the year is **below ₹15,000**. Above that, taxable as a perquisite. | | Cash gift from employer, in any amount | **Taxable**. The limit applies only to non-cash gifts. | | Gifts from relatives | Exempt, no limit. | | Gifts from friends, clients, others | Taxable only if the total for the year is **above ₹50,000**. Then the whole amount is taxed. | ## For employees - **Bonus:** it is added to your salary for the month. Your employer deducts TDS, and it shows in Form 16 and AIS. - **Gifts and vouchers:** count everything your employer gave you in the whole year, not just at Diwali. A Diwali hamper, a birthday voucher and an award gift all go into the same ₹15,000. - **Check your payslip:** if the total crosses the limit, the value should be added to your taxable salary. Do not wait for the notice. - See how a bonus changes your tax in our [free Income Tax Calculator](https://www.anukram.in/tools/income-tax-calculator.html). Choose Tax Year 2026-27. ## For employers 1. **Statutory bonus:** bonus is now governed by the **Code on Wages, 2019** (Chapter IV), which replaced the Payment of Bonus Act from 21 November 2025. The main rules carried over: employees with wages up to ₹21,000 a month are eligible, the minimum is 8⅓% of wages (or ₹100) and the maximum is 20%, calculated on ₹7,000 or the minimum wage, whichever is higher. It is payable within eight months of the end of the accounting year. A Diwali "festive bonus" is usually a separate, voluntary payment. 2. **TDS:** include the bonus and any taxable gift value when you work out the employee's TDS for the month. 3. **Deduction:** bonus is allowed as an expense only when it is actually paid, on or before the due date of your income-tax return. This is Section 37 of the Income-tax Act, 2025 (earlier Section 43B). Unpaid bonus shown as a provision in the books is not allowed. 4. **GST:** gifts to an employee up to ₹50,000 in a financial year are outside GST. Above that, the excess is treated as a supply. **Input tax credit on gifts is blocked** under Section 17(5)(h), including gifts to customers and dealers. Do not claim it in GSTR-3B. 5. **Records:** keep a list of who received what, the value and the reason. It protects your deduction and your TDS. **Plan before 31 October.** Decide your gift budget per employee now. A hamper of ₹4,000 is fine. Adding a ₹12,000 voucher at Diwali, when the employee already got ₹5,000 of gifts this year, takes them over ₹15,000. Pay bonuses through payroll so TDS and records stay correct. Related reading: [what the Income Tax Act 2025 changes from April 2026](https://www.anukram.in/blog/income-tax-act-2025-what-changes-from-april-2026.html), [GSTR-3B ITC locking](https://www.anukram.in/blog/gstr-3b-itc-locking-ims-july-2026.html) and our [payroll service](https://www.anukram.in/payroll-processing.html). ### Planning Diwali bonuses and gifts? Send us your staff list and gift budget on WhatsApp. We will check TDS, the gift limit and GST before you pay. [WhatsApp us → +91 96315 26999](https://wa.me/919631526999?text=Hi+Anurag,+I+need+help+with+Diwali+bonus+and+gift+tax+for+my+employees.) ## Frequently asked questions ### Is a Diwali bonus from my employer taxable? Yes. A cash bonus or festive bonus is part of your salary and is taxed at your slab rate. Your employer deducts TDS on it. ### What is the tax-free limit for Diwali gifts from an employer in 2026? Under the Income-tax Rules 2026, gifts, vouchers and tokens from your employer are treated as nil value if the total for the tax year is below ₹15,000. The old limit was ₹5,000. It covers non-cash gifts and vouchers only. Cash is always taxable. ### What if my employer's gifts add up to more than ₹15,000? Then the gifts are taxed as a perquisite under salary, at your slab rate. Keep the total for the year below the limit, and count every gift, including birthday and award gifts. ### Do I pay tax on Diwali gifts from friends, clients or relatives? Gifts from specified relatives are exempt without limit. Gifts from others (non-relatives) are taxable if the total in the year is more than ₹50,000, and then the whole amount is taxed, not just the excess. ### Can a business claim GST input tax credit on Diwali gifts? No. Input tax credit on goods given as gifts is blocked under Section 17(5)(h) of the CGST Act. Gifts to one employee above ₹50,000 in a financial year are also treated as a supply and attract GST. This article is general information, not professional tax advice for your situation. Limits are as reported under the Income-tax Rules 2026 (in force from 1 April 2026) and the Code on Wages, 2019 as of 4 October 2026. Many older articles still quote the old ₹5,000 gift limit; confirm on *incometax.gov.in* before you rely on it. Related services: [Payroll Processing](https://www.anukram.in/payroll-processing.html) · [TDS Return Filing](https://www.anukram.in/tds-return-filing.html) · [ITR Filing](https://www.anukram.in/itr-filing.html). --- Page: https://www.anukram.in/blog/diwali-bonus-gifts-tax-2026.html Contact: WhatsApp +91 96315 26999 | hello@anukram.in | Hyderabad, Telangana, India