# Diwali Bonus Tax and Gift Tax Rules for FY 2026-27 > Is your Diwali bonus taxable? Yes, as salary. Employer gifts and vouchers are tax-free below INR 15,000 a year under the 2026 rules. Full guide with sources. - **Published**: 2026-10-18 - **Modified**: 2026-10-18 - **Category**: tax-planning - **URL**: https://www.tldr.money/articles/tax-planning/diwali-bonus-gift-tax-rules --- Start with the [tax planning guide](/tax-planning) for the bigger picture. This page covers **Diwali bonus tax and gift tax rules** for tax year 2026-27 (April 2026 to March 2027), the first year under the Income-tax Act, 2025 and the Income-tax Rules, 2026. ## Is your Diwali bonus taxable? Yes. A cash bonus, whether it is called a Diwali bonus, festival bonus or performance bonus, is part of your salary. It is added to your income for the year and taxed at your slab rate. Your employer includes it when working out TDS, so you may see more tax deducted in the month it is paid. To see what reaches your bank account, put the bonus into the [in-hand salary calculator](/tools/in-hand-salary-calculator). To check whether it changes which regime suits you, use the [income tax calculator](/tools/income-tax-calculator) and read [new vs old tax regime](/articles/tax-planning/new-vs-old-tax-regime-fy2026-27). ## Diwali gift tax rules: gifts from your employer Gifts in kind, vouchers and tokens from an employer are perquisites, and the Income-tax Rules, 2026 set out how to value them. Entry 4 of the perquisite valuation table covers "any gift, or voucher, or token (in lieu of gift)" received by an employee or a member of their household, "on ceremonial occasions or otherwise". Its value is the amount of the gift, but it is "nil, if the value of such gift, voucher or token... is below INR 15,000 in aggregate during the tax year". What this means: - **Below INR 15,000 in total for the year:** not taxed. - **INR 15,000 or more in total:** on a plain reading, the whole value is taxed as a perquisite, not just the amount above INR 15,000. - **Count everything from your employer in the year,** not just Diwali. A birthday voucher and a Diwali hamper add up. ### INR 5,000 or INR 15,000? Why sources disagree Some articles, including recent ones, still quote a INR 5,000 limit. That was the threshold in the old Income-tax Rules, 1962. The new rules, notified on 20 March 2026 and in force from 1 April 2026, use INR 15,000. We checked the notified Gazette text (G.S.R. 198(E)) directly. For tax year 2026-27, INR 15,000 applies. ## Gifts from friends and family Separate rules apply to gifts from people other than your employer. According to the Income Tax Department's guide to gifts under the Income-tax Act, 2025: | Gift | Tax treatment | |---|---| | From a relative | Exempt, whatever the amount | | On your marriage | Exempt | | Under a will or inheritance | Exempt | | Money from non-relatives, total up to INR 50,000 in the year | Exempt | | Money from non-relatives, total above INR 50,000 in the year | The whole amount is taxable | So INR 20,000 from three friends each (INR 60,000 in total) is fully taxable, while INR 1 lakh from your parents is not. Gifts of property such as jewellery or shares have their own rules; check the department's guide. ## How to report it in your return A cash bonus and any taxable employer gifts appear in your Form 16 as salary. Taxable gifts from non-relatives go under income from other sources. Pick the right form with [which ITR form to file](/articles/tax-planning/which-itr-form-to-file). ## Sources - Income-tax Rules, 2026 (G.S.R. 198(E), Notification No. 22/2026, 20 Mar 2026), perquisite valuation table, entry 4: https://www.incometax.gov.in/iec/foportal/sites/default/files/2026-03/En-Notified-IT-Rules-2026-20-03-2026.pdf - Income Tax Department, Tax treatment of gifts (Income-tax Act, 2025), incometaxindia.gov.in - Mint, Diwali bonus: will your festive payout be taxed, 15 Oct 2026: https://www.livemint.com/money/personal-finance/diwali-bonus-will-your-festive-payout-be-taxed-what-salaried-employees-need-to-know-11792071949367.html - Mint, employer gifts up to INR 15,000 now tax-free: https://www.livemint.com/money/personal-finance/employer-gifts-up-to-15-000-now-tax-free-heres-what-salaried-taxpayers-need-to-know-about-the-higher-limit-11788970097263.html --- - [More tax-planning articles](https://www.tldr.money/articles/category/tax-planning) - [All articles](https://www.tldr.money/articles)