Deduction of Income Tax on case reward given to employees children

[Pradeep Jain]

Sir,  Our  Company give cash reward/prize to the children of employees every year  who has got more percent from the prescribed limit. Will this amount will be part of Employee CTC and income tax is payable thereon. Regards  Pradeep Jain

[CAGOPALJI AGRAWAL]

Gift below 5000/- per annum is exempt.

AI Summary

Gift exemption for employee children's cash rewards can exclude small annual gifts from taxable employee income. Whether cash rewards given by an employer to employees' children are part of the employee's CTC and taxable is queried; the reply states that such payments treated as gifts qualify for exemption where a gift below 5000 per annum is exempt, indicating nominal annual rewards are not taxable if they fall within that exemption.