A corporate gift under ₹5,000 that stays inside the tax-free limit
There is a line in the Income-tax Rules that shapes a great deal of corporate gifting in India without many people knowing it is there. Under Rule 3(7)(iv), a gift, voucher or token in kind given by an employer to an employee is treated as a nil perquisite when its aggregate value in the financial year is below ₹5,000. Below that figure the gift is simply a gift. At or above it, the whole value can become taxable in the employee’s hands.
Three things follow for anyone choosing a gift. The figure is aggregate for the year, so a Diwali gift and a birthday gift to the same person add up. The value that counts is what the gift is worth, and for a book that is the printed MRP, whatever you paid for it. And a gift priced at ₹4,995 is inside the line while a gift priced at ₹5,000 is on it.
This is general information, written by a seller of a book and not by a tax adviser. The rule has details and exceptions, and your own adviser should confirm how it applies to you. With that said, here is how to choose within it.
Choosing a gift under ₹5,000
Look at the MRP, not your discount
A ₹6,000 item bought at 20 percent off is still a ₹6,000 gift to the person who receives it. The Ethical Leader’s Gita carries a printed MRP of ₹4,995 for this reason, so that the gift sits inside the limit however many copies you buy.
Count the year, not the occasion
If the same people receive something at Diwali and again at the year end, keep the two together under ₹5,000, or choose one occasion for the better gift.
Spend the room on quality
Under ₹5,000 buys a very good book and very ordinary electronics. A hardback made to last is the better use of the budget at this level.
Keep the paperwork simple
Printed books are nil-rated under GST, so there is no GST on the price and the invoice in your company’s name is a plain one.
The Ethical Leader’s Gita
Each of the 700 verses of the Bhagavad Gita on a page of its own, with the Sanskrit, a transliteration, the meaning in English and in Hindi, and a reflection on what the verse asks of a person who leads others. An 880-page hardback with jacket, 11 by 8.5 inches, with forewords by Prof. Dr. Sunil Maheshwari and Prof. Dr. Vishal Gupta of IIM Ahmedabad. MRP ₹4,995. On this site ₹4,295 including courier within India, and from ₹4,160 per copy for 10 copies or more.