Diwali cash bonuses count as salary and increase taxable income
Business
Diwali bonuses are always a nice perk, but here's the deal: your cash bonus counts as part of your salary and gets taxed just like your regular pay.
So if you get a ₹20,000 bonus, it'll be added to your income for the year and could bump up your tax bill depending on your slab.
Noncash gifts tax free ₹5,000
Got a gadget or gift instead? Noncash gifts are tax-free if they don't cross ₹5,000 in value for the year (think: an air fryer is fine, but a pricey smartphone isn't).
When tax time comes around, remember to report any cash bonuses as salary in your returns and double-check that TDS is reflected correctly in Form 16: this helps you avoid any surprise dues later.