Diwali 2026 Money Guide: Tax on Gifts, Bonus and Gold — the ₹15,000 Gift from Your Employer, Gifts to Spouse and Parents, and What You Pay When You Sell Gold
A festive-season tax guide for tax year 2026-27, the first Diwali under the Income-tax Act, 2025. Gifts from an employer are tax-free below ₹15,000 a year, up from ₹5,000. Gifts from friends are taxed in full once they cross ₹50,000. A gift to a spouse, daughter-in-law or minor child saves no tax on the income it earns. A bonus can be taxed away almost entirely near ₹12 lakh of income. Cash of ₹2 lakh or more cannot be accepted even from a relative. Gold sold after 24 months is taxed at 12.5%, and Sovereign Gold Bonds redeemed early are no longer tax-free. With the rules for employers on GST, TDS and statutory bonus.
Diwali is when money moves in ways it does not for the rest of the year. Employers hand out vouchers and a bonus. Parents give to children and children to parents. Families buy gold on Dhanteras, and some sell old gold to pay for it. Each of these has a tax rule, and this year several of the rules are new. It is the first Diwali under the Income-tax Act, 2025, so every section number has changed. The limit on gifts from an employer has tripled. Sovereign Gold Bonds have lost part of their tax exemption. This guide covers each transaction in turn, with the figures and where to check them.
Law as it stands on 29 September 2026, for tax year 2026-27 (1 April 2026 to 31 March 2027). Dhanteras is on Friday 6 November and Diwali on Sunday 8 November 2026. Section numbers are those of the Income-tax Act, 2025, with the 1961 number beside them; any other old reference can be converted in the Act 2025 Translator. Where a point is unsettled, this guide says so. It explains the rules. It is not advice on your own case.
₹15,000 — gifts from an employer below this, in a year, are not taxed · ₹50,000 — gifts from non-relatives above this are taxed in full · ₹2 lakh — cash at or above this cannot be accepted from one person · 24 months — after this, gold is a long-term asset · 12.5% — tax on that long-term gain · 3% — GST on gold and gold jewellery.
1. Gift from your employer: the ₹15,000 limit
A gift from an employer is a perquisite, which makes it part of salary. Rule 15 of the Income-tax Rules, 2026 values it at the amount of the gift, and then gives one relief. The value is nil if the gifts, vouchers and tokens received in the tax year add up to less than ₹15,000. Under the 1962 Rules the figure was ₹5,000, so the limit has tripled.
| What you receive in the year | Tax treatment |
|---|---|
| Sweets, a hamper and a shopping voucher, together ₹12,000 | Not taxed |
| Gifts and vouchers of exactly ₹15,000 | Taxed. The rule says "below ₹15,000", so ₹14,999 is the last safe figure |
| Gifts and vouchers of ₹18,000 | On the words of the rule, the whole ₹18,000 is salary. Some advisers tax only the ₹3,000 above the limit. The department has not settled the point |
| Cash, or a cheque, of any amount | Salary in full. The relief is for gifts in kind and vouchers |
| A gift to your spouse or child from your employer | Counted with yours. The rule covers gifts to a member of the household |
Four points on this rule.
- The limit is for the year. A ₹10,000 voucher at Diwali and a ₹6,000 gift on a work anniversary add up to ₹16,000, and the relief is lost.
- It applies in both tax regimes. Nothing in the rule or in the new regime's list of denied exemptions excludes it.
- Two neighbouring limits also rose. Meals and meal vouchers are tax-free up to ₹200 a meal, against ₹50 earlier. An interest-free loan or festival advance from the employer carries no perquisite value if loans total ₹2 lakh or less, against ₹20,000 earlier.
- It shows on your certificate. A taxable gift appears in Form 123, the statement of perquisites that replaced Form 12BA, and in Form 130, which replaced Form 16.
2. Diwali bonus: how much of it you keep
A bonus is salary, taxed in the year it is due or paid, whichever is earlier. The employer re-estimates your income for the year and deducts more TDS over the remaining months under section 392, the old section 192. The rate is your own slab rate, so the cost depends on where your income already stands.
| Salary for the year | Bonus | Extra tax | What is left of the bonus |
|---|---|---|---|
| ₹9,00,000 | ₹50,000 | Nil | ₹50,000 |
| ₹12,75,000 | ₹50,000 | ₹52,000 | Nothing, and ₹2,000 more |
| ₹13,00,000 | ₹50,000 | ₹48,100 | ₹1,900 |
| ₹15,00,000 | ₹1,00,000 | ₹15,600 | ₹84,400 |
| ₹20,00,000 | ₹1,00,000 | ₹22,100 | ₹77,900 |
| ₹30,00,000 | ₹2,00,000 | ₹62,400 | ₹1,37,600 |
New regime, tax year 2026-27, salaried employee with the ₹75,000 standard deduction and no other income. Cess at 4% included. Figures from this site's income tax calculator.
Why a bonus near ₹12 lakh can vanish
Under the new regime a resident whose taxable income is ₹12 lakh or less pays no tax, because the rebate under section 156 (the old 87A) cancels it. One rupee above ₹12 lakh the rebate is gone, and the tax on the whole income, about ₹60,000, would fall due. The law softens this with a marginal relief: the tax cannot exceed the income above ₹12 lakh. So between ₹12 lakh and about ₹12.71 lakh of taxable income, every extra rupee earned is a rupee of tax, and the 4% cess is added on top.
A salary of ₹12.75 lakh is taxable income of exactly ₹12 lakh. A ₹50,000 bonus takes it to ₹12.5 lakh. The tax is ₹50,000, the cess ₹2,000, and the employee is ₹2,000 worse off for having received the bonus. If your income is close to this band, ask your employer whether part of the bonus can go to the National Pension System as an employer contribution, or be paid in the next tax year. Test your own figure in the calculator before the bonus is paid.
Statutory bonus
The Payment of Bonus Act, 1965 was repealed when the four labour codes came into force on 21 November 2025. Bonus is now governed by the Code on Wages, 2019. The main figures carried over, and were re-notified on 25 August 2026.
| Rule | Figure |
|---|---|
| Who is covered | An employee earning wages of ₹21,000 a month or less, who worked at least 30 days in the year, in an establishment of 20 or more persons |
| Wages on which bonus is worked out | Up to ₹7,000 a month, or the minimum wage if that is higher |
| Minimum and maximum | 8.33% and 20% of those wages |
| Last date to pay | Eight months from the end of the accounting year. For the year to 31 March 2026 that is 30 November 2026 |
| How it is paid | By credit to the employee's bank account. This is new |
The two notifications were issued by the Central Government. For most private employers the State is the authority under the Code, and how far the central figures bind them is being argued. The CTC break-up calculator shows the statutory bonus on your own wages.
3. Gifts between family and friends
India has no gift tax on the giver. The receiver is taxed, under section 92(2)(m), the old 56(2)(x), and only where the gift is not covered by an exception.
| Gift received from | Tax when you receive it | Who pays tax on the income it earns later |
|---|---|---|
| Your husband or wife | None | The giver. The income is added to the giver's |
| Your parents or grandparents | None | You, if you are an adult |
| Your adult son or daughter | None | You |
| Your father-in-law or mother-in-law, if you are their daughter-in-law | None | The giver |
| Your brother or sister, or your spouse's | None | You |
| A parent or grandparent, if you are a minor | None | Your parent with the higher income |
| An uncle or aunt (a parent's brother or sister) | None | You |
| A cousin, a friend, a neighbour, a business contact | None up to ₹50,000 in the year. Above that, the whole amount at your slab rate | You |
| Anyone, on the occasion of your own wedding | None | You |
| Anyone, under a will or by inheritance | None | You |
Who counts as a relative
The Act lists them in section 92(5). For an individual they are the spouse; brothers and sisters; the spouse's brothers and sisters; the brothers and sisters of either parent; parents, grandparents, children and grandchildren; the same ascendants and descendants of the spouse; and the spouses of all of these. Cousins are not on the list. Nor are friends, however close.
The ₹50,000 limit is a cliff
Gifts of money from non-relatives are added up for the tax year. If the total is ₹50,000 or less, nothing is taxed. If it is ₹53,000, all ₹53,000 is taxed, not the ₹3,000 above the limit. The department's own tutorial uses this example. Diwali, birthday and anniversary gifts all count. Only a gift on the receiver's own marriage is exempt whoever gives it. Jewellery, bullion, shares and property are tested the same way, at their market value.
Gift to your wife or husband: the clubbing rule
You can give your spouse any amount and neither of you pays tax on the gift. What the gift earns afterwards is a different matter. Under section 99, the old section 64, income from an asset given to a spouse without adequate consideration is included in the giver's income.
The last figure is the one planning rests on. Income earned on the clubbed income is the receiver's own. The department confirms this in its questions and answers on clubbing, and the Madras High Court held the same in M.S.S. Rajan (2001). The rule follows the asset, though. If the gift is moved from a deposit into shares, the dividend is still clubbed.
The same rule covers a gift to a daughter-in-law, and a gift to a minor child, whose income is added to that of the parent with the higher income. A minor's earnings from the child's own work or talent are not clubbed.
One exemption has quietly changed. Up to ₹1,500 of each minor child's clubbed income is exempt, but section 202 withholds that exemption from a taxpayer on the new regime. It survives only in the old regime.
Gift to parents, and to adult children
A gift to a parent or to an adult son or daughter is outside the clubbing rule. The receiver owns the money, and the income it earns is the receiver's, taxed at the receiver's own slab. A parent aged 60 or more with little other income may pay no tax on it at all.
Two conditions keep this honest. The gift must be real: the money becomes the parent's, to spend or leave as they choose. And it must not be a circle. If you give ₹5 lakh to your brother's wife and he gives ₹5 lakh to yours, the Act treats each as an indirect gift to the giver's own spouse. The Supreme Court settled that in C.M. Kothari in 1963.
4. Cash: the ₹2 lakh rule applies inside the family too
Section 186, the old 269ST, bars any person from receiving ₹2 lakh or more in cash from one person in a day, for one transaction, or for one event or occasion. The penalty under section 451 equals the amount received, and it falls on the receiver.
- There is no exception for relatives. A father's gift of ₹3 lakh in cash to his daughter is exempt from tax as a gift, and still breaks section 186.
- The test is "₹2 lakh or more". Exactly ₹2 lakh is caught.
- One occasion is one limit. Cash from the same person in instalments for the same wedding or festival is added together.
- The way out is the bank. A transfer, a cheque or UPI is not restricted, and leaves the record that proves the gift.
No deed is needed for a gift of money or jewellery. A short signed letter naming the giver, the receiver, the relationship and the amount, kept with the bank entry, is the evidence an assessing officer asks for. A gift of land or a house needs a registered deed, and the stamp duty on it is set by the State.
5. Buying gold on Dhanteras
Gold is near ₹1,47,400 for ten grams of 24 carat, by the India Bullion and Jewellers Association's rate for 29 September, before GST. It is far dearer than a year ago. The price at which the RBI redeems Sovereign Gold Bonds was ₹15,328 a gram in early September, against ₹10,905 a year earlier, a rise of about 40%.
| Item | The rule |
|---|---|
| GST | 3% on gold, coins and jewellery. On ready-made jewellery the 3% applies to the whole bill, making charges included. Where a jeweller works on gold you supply and bills the labour separately, the labour carries 5% |
| Import duty | Reported at 15% since May 2026, against 6% earlier. It is already in the price you pay |
| PAN | To be quoted on a purchase above ₹2 lakh, under rule 159. Without a PAN, a declaration in Form 97, which replaced Form 60 |
| Cash | The jeweller cannot accept ₹2 lakh or more in cash for one purchase |
| Identity check | Required for cash dealings of ₹10 lakh or more with a jeweller, under the money-laundering rules |
| Tax collected at source | None on jewellery or bullion |
| Hallmark | Mandatory for 14, 18, 20, 22, 23 and 24 carat in the 392 districts on the Bureau of Indian Standards' list. The mark has three parts: the BIS logo, the purity, and a six-character HUID that can be checked in the BIS Care app. 9 carat hallmarking is available but voluntary |
Which form of gold, by the tax on the way out
| Form | Long-term after | Tax on a long-term gain | Tax on a short-term gain |
|---|---|---|---|
| Jewellery, coins, bars | 24 months | 12.5% | Your slab rate |
| Digital gold | 24 months | 12.5% | Your slab rate |
| Gold ETF, listed on an exchange | 12 months | 12.5% | Your slab rate |
| Gold mutual fund or fund of funds | 24 months | 12.5% | Your slab rate |
| Sovereign Gold Bond sold on the exchange | 12 months | 12.5% | Your slab rate |
| Sovereign Gold Bond redeemed early with the RBI | — | 12.5%, from 1 April 2026 | — |
| Sovereign Gold Bond held by its first buyer to maturity | — | Exempt | — |
Digital gold carries a warning. On 8 November 2025 SEBI cautioned the public that digital gold products are "neither notified as securities nor regulated as commodity derivatives" and operate outside its purview. It named gold ETFs and electronic gold receipts as the regulated alternatives. No regulation of digital gold has been notified since.
How much gold you may hold. There is no legal limit, if the source can be explained. In a search, jewellery up to 500 grams for a married woman, 250 grams for an unmarried woman and 100 grams for a man is not seized even without papers. The Finance Ministry said so on 1 December 2016, and the instruction behind it dates from 1994.
6. Selling gold: the tax, and the traps
Gold held for more than 24 months is a long-term capital asset under section 2(101), and the gain is taxed at 12.5% under section 197, the old 112. There is no indexation. Gold sold within 24 months is taxed at your slab rate.
- Exchanging old jewellery for new is a sale. The Act defines transfer to include exchange. The value the jeweller allows for the old gold is the sale price, and the gain is taxed though no cash is received. GST is charged on the full value of the new piece, not on the difference.
- Gifted or inherited gold takes the earlier owner's cost. Under section 73, your cost is what the previous owner paid, and the time they held it counts towards your 24 months. For gold bought before 1 April 2001, you may use its market value on that date as the cost.
- The ₹12 lakh rebate does not cover this gain. Section 156 limits the new-regime rebate to tax at slab rates. A person with ₹8 lakh of salary and ₹3 lakh of long-term gain on gold pays 12.5% on the gain.
- A shortfall in the basic exemption does help. A resident whose other income is below ₹4 lakh can set the unused part of the exemption against the gain.
- Buying a house can exempt the gain. Under section 86, the old 54F, the gain is exempt if the sale proceeds are put into one residential house in India, bought within a year before or two years after the sale, or built within three years. The house may cost up to ₹10 crore for this purpose, and you must not own more than one other house on the date of sale.
Work out the tax on your own sale in the capital gains calculator.
Sovereign Gold Bonds: the exemption has narrowed
Until 31 March 2026, an individual who redeemed a Sovereign Gold Bond paid no tax on the gain, whether at maturity or in the early-redemption window after the fifth year. The Finance Act, 2026 rewrote the provision. Section 70 now exempts a redemption only where the bond is "held by an individual from the date of original issue till maturity".
Two groups lose the exemption. A first buyer who redeems early is taxed on the gain. So is a person who bought the bond on the stock exchange, even if it is then held to maturity. The 2.5% interest was always taxable and remains so. With gold so much higher than a year ago, many holders are looking at the early-redemption window, and the tax is now part of that sum.
7. Gifts to and from family abroad
- A gift from a relative abroad is exempt in the same way as one from a relative in India. The exception has no residence condition.
- A gift to a relative abroad falls within the Liberalised Remittance Scheme limit of $250,000 a year for each resident. A rupee gift to a non-resident relative is credited to their NRO account and counts within the same limit.
- Tax is collected at source on the remittance. Under section 394, the bank collects 20% on remittances above ₹10 lakh in the year for purposes other than education or medical treatment, and a gift is such a purpose. For education and medical treatment the rate is 2%. The tax collected is not lost: it is credited against your own tax for the year.
- A gift above ₹50,000 from a resident to a non-resident who is not a relative is treated as income arising in India, under section 9.
8. For employers and business owners
| Question | Answer |
|---|---|
| Is GST payable on Diwali gifts to employees? | Not where the gifts to an employee are ₹50,000 or less in value in the financial year. Schedule I of the CGST Act treats them as outside supply. Above that, GST applies |
| Can input tax credit be claimed on the gifts? | No. Section 17(5) blocks credit on goods disposed of by way of gift or free samples, and on food and beverages |
| Is the cost deductible in computing profit? | Yes, as expenditure wholly for the business under section 34, the old 37. Bonus to employees is deductible under section 32 |
| By when must bonus be paid to claim it this year? | By the due date of the return under section 37, the old 43B: 31 October for companies and audited accounts, 31 August where accounts are not audited. Paid later, it is deducted in the year of payment |
| Gifts to dealers, distributors and clients | TDS at 10% under section 393, the old 194R, where the benefits to one recipient exceed ₹20,000 in the year, on the whole value. Where the gift is in kind, the giver must see that the tax is paid before handing it over |
| Does that TDS apply to gifts to employees? | No. A gift to an employee is a perquisite, and salary TDS applies |
| Gift vouchers | A voucher is neither goods nor services for GST. The tax arises on what it is redeemed for |
The TDS calculator and the GST calculator cover the last two items.
What it means for you
| If you… | What to do before Diwali |
|---|---|
| Are salaried and expect gifts from your employer | Add up what you have already received since April. Below ₹15,000 for the year, nothing is taxed. |
| Expect a bonus, on a salary between about ₹12 lakh and ₹13.5 lakh | Run the figure in the calculator. In this band half or more of the bonus, and sometimes all of it, goes in tax. Ask about an employer NPS contribution or the timing of the payment. |
| Plan to give money to your spouse | Give it if you wish; no tax arises on the gift. Expect the income it earns to be taxed as yours. |
| Plan to give money to parents or adult children | Send it through the bank and keep a short signed letter. The income it earns is theirs. |
| Receive gifts from friends | Keep the year's total in view. At ₹50,001 the whole amount becomes income. |
| Are buying jewellery | Check the hallmark and HUID, pay by bank above ₹2 lakh, and keep the bill. It is the proof of cost when you sell. |
| Are exchanging old gold for new | Work out the gain on the old gold first. The exchange is taxed as a sale. |
| Hold Sovereign Gold Bonds | Early redemption is now taxed at 12.5%. Holding to maturity keeps the exemption, if you were the first buyer. |
| Run a business | Keep gifts to each employee within ₹50,000 for the year, deduct TDS on gifts to dealers above ₹20,000, and pay statutory bonus by 30 November. |
Festive tax turns on who gives, who receives and how. A relative's gift is never taxed on receipt, but a gift to a spouse, daughter-in-law or minor child leaves its income with the giver. A friend's gift is free to ₹50,000 and fully taxed beyond it. An employer's gift is free below ₹15,000. Cash of ₹2 lakh or more is barred for everyone. Gold is taxed at 12.5% after two years, an exchange counts as a sale, and Sovereign Gold Bonds redeemed early have lost their exemption. For a bonus, check your slab before it is paid, not after.
Frequently Asked Questions
How much gift money is tax-free in India? From a relative, any amount. From anyone else, up to ₹50,000 in total in a tax year. If gifts from non-relatives exceed ₹50,000, the whole amount is taxed as income from other sources at your slab rate.
Are gifts from an employer taxable? Gifts, vouchers and tokens in kind are not taxed if they total less than ₹15,000 in the tax year. At ₹15,000 or more they are taxed as salary. A gift in cash is salary whatever the amount.
Is a Diwali bonus taxable? Yes. It is salary, taxed at your slab rate, and the employer deducts TDS on it. Near ₹12 lakh of taxable income under the new regime, most or all of a bonus can be taken by tax because the rebate is withdrawn.
How much money can I gift to my wife? Any amount, without tax on the gift. The income the gifted money earns is added to your income under the clubbing rule in section 99. Income earned by reinvesting that income is hers.
Do I have to pay tax on a gift from my father, or can I gift ₹20 lakh to my son? A gift between a parent and a child is exempt whatever the amount. If the child is an adult, the income from the gift is the child's. If the child is a minor, it is added to the income of the parent who earns more.
Do I have to pay tax if my brother gave me money? No. Brothers and sisters, and their spouses, are relatives. The income the money earns later is yours.
Can I gift to my daughter-in-law? Yes, and she pays no tax on receiving it. The income from what you give is added to your own income, as with a spouse.
Can a gift be received in cash from relatives? Below ₹2 lakh, yes. Section 186 bars receiving ₹2 lakh or more in cash from one person in a day or for one occasion, and it has no exception for relatives. The penalty equals the amount received.
Do I pay tax if I am gifted shares or gold? Not if the giver is a relative. When you sell, your cost is what the giver paid, and the time the giver held the asset counts as yours. From a non-relative, shares or gold worth more than ₹50,000 are taxed at their market value when received.
Can input tax credit be claimed on Diwali gifts given to employees? No. GST law blocks credit on goods given as gifts. No GST is payable on the gift itself where gifts to the employee are ₹50,000 or less in the year.
What is the tax on selling gold jewellery? 12.5% on the gain if the gold was held for more than 24 months, with no indexation. If held for 24 months or less, the gain is added to income and taxed at the slab rate.
Is exchanging old gold for new jewellery taxable? Yes. The Act treats an exchange as a transfer, so the gain on the old gold is taxed as if it had been sold for the value the jeweller allowed.
Rules, rates and limits change, and a few points above are unsettled. Gold prices move daily. Check the official text, listed below, before acting. Educational explanation only — not tax, legal or investment advice.
Sources
The rules and figures in this article can be checked against these official sources.
- Income-tax Rules, 2026, rule 15: valuation of perquisites Income Tax Department
- Income-tax Act, 2025, section 17: perquisites Income Tax Department
- Income-tax Act, 2025, section 392: tax deducted at source on salary Income Tax Department
- Income-tax Act, 2025, section 202: the new tax regime Income Tax Department
- Income-tax Act, 2025, section 156: rebate of income-tax Income Tax Department
- Income-tax Act, 2025, section 92: income from other sources, including gifts Income Tax Department
- Income-tax Act, 2025, section 99: income of spouse and minor child included with the individual’s Income Tax Department
- Income-tax Act, 2025, Schedule III: allowances and receipts not included in income Income Tax Department
- Tax treatment of gifts received by an individual or HUF Income Tax Department
- Frequently asked questions on clubbing of income Income Tax Department
- Income-tax Act, 2025, section 186: receipts of ₹2 lakh or more in cash Income Tax Department
- Income-tax Act, 2025, section 451: penalty for receiving cash against section 186 Income Tax Department
- Income-tax Act, 2025, section 394: collection of tax at source Income Tax Department
- Liberalised Remittance Scheme: frequently asked questions Reserve Bank of India
- Income-tax Act, 2025, section 70: transactions not regarded as transfer Income Tax Department
- Income-tax Act, 2025, section 73: cost of an asset received by gift or inheritance Income Tax Department
- Income-tax Act, 2025, section 2: definitions, including the holding period of a capital asset Income Tax Department
- Income-tax Act, 2025, section 197: tax on long-term capital gains Income Tax Department
- Income-tax Act, 2025, section 86: gain invested in a residential house Income Tax Department
- Income-tax Act, 2025, section 90: cost of acquisition and improvement Income Tax Department
- Income-tax Rules, 2026, rule 159: transactions in which PAN must be quoted Income Tax Department
- Income-tax Act, 2025, section 393: tax to be deducted at source Income Tax Department
- Income-tax Act, 2025, section 32: other deductions, including bonus to employees Income Tax Department
- Income-tax Act, 2025, section 37: deductions allowed only on actual payment Income Tax Department
- CGST Act, 2017, Schedule I: supplies made without consideration CBIC
- CGST Act, 2017, section 17: blocked credits CBIC
- Press release on gifts and perquisites from an employer under GST, July 2017 CBIC
- Circular 92/11/2019-GST: gifts, free samples and sales promotion schemes CBIC
- The four labour codes made effective from 21 November 2025 Ministry of Labour and Employment, through the Press Information Bureau
- No limit on holding gold jewellery acquired from explained sources: clarification of 1 December 2016 Ministry of Finance, through the Press Information Bureau
- Mandatory hallmarking: districts and caratages covered, 13 March 2026 Ministry of Consumer Affairs, through the Press Information Bureau
- Mandatory hallmarking orders and the list of districts Bureau of Indian Standards
- Caution to the public on dealing in digital gold, 8 November 2025 Securities and Exchange Board of India
- Guidance for dealers in precious metals and stones on cash transactions Financial Intelligence Unit, India
- Daily gold and silver rates India Bullion and Jewellers Association
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