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

Employee Children's Academic Rewards Not Included in CTC; Gifts Under 5000 INR Tax-Exempt A company provides annual cash rewards to employees' children who exceed a certain academic performance threshold. A query was raised about whether this reward should be included in the employee's Cost to Company (CTC) and whether it is subject to income tax. The response clarified that gifts below 5000 INR per annum are exempt from income tax.