GST on corporate gifts in India.
Two numbers do most of the work — the ₹50,000 GST threshold and the ₹5,000 income-tax threshold — and they are not the same tax. Here is how each applies to gifts for employees and clients, with the provision behind every figure.
This is general information for planning, not tax or legal advice. Tax rules change and depend on your specific facts — confirm the treatment of any gifting spend with your own chartered accountant or tax advisor.
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Two limits people mix up — and they're different taxes.
The single biggest source of confusion is treating these as one rule. They aren't: one is GST, one is income tax, and a gift is checked against each separately.
Gifts from employer to employee up to ₹50,000 in a year are not a supply, so no GST. Above it, the gift is a taxable supply.
Non-cash gifts up to ₹5,000 in aggregate are exempt for the employee. Above it, the value is a taxable perquisite. Cash and money-vouchers: fully taxable.
GST on gifts to employees
Under Schedule I of the CGST Act, a gift from an employer to an employee is not treated as a supply as long as its value stays within ₹50,000 per employee in a financial year — so no GST is charged on giving it. Cross that ₹50,000 in the year and the gift becomes a taxable supply on which the employer accounts for GST. The CBIC confirmed this position in a press release dated 10 July 2017.
Input tax credit (ITC) on gifts
Separately from the ₹50,000 question, Section 17(5) of the CGST Act blocks input tax credit on goods disposed of by way of gift. In practice that means the GST a company pays when it buys corporate gifts generally cannot be claimed back as ITC. Whether specific items — for example, things contractually promised as part of employment — are treated differently is a question for your tax advisor.
Income tax for the employee
For the person receiving the gift, Rule 3(7)(iv) of the Income-tax Rules exempts gifts in kind up to ₹5,000 in aggregate during the financial year; where the total crosses ₹5,000, the value is taxable as a perquisite in the employee's hands. Gifts given in cash, or vouchers that can be converted into money, are fully taxable regardless of the ₹5,000 limit.
Keeping corporate gifting tax-clean.
None of this needs to be daunting — a few habits keep gifting predictable at tax time. Always confirm specifics with your advisor.
Know which limit you're near
Check a gift against the ₹50,000 GST line and the ₹5,000 perquisite line separately.
Prefer gifts in kind
Cash and money-convertible vouchers are fully taxable for the employee; a gift in kind gets the ₹5,000 exemption.
Keep clean records
Per-employee values across the year are what both limits are measured against — track them.
Itemise the GST
Every Swpe quote shows GST as a line item, so your finance team sees the tax on each order up front.
Plan festival rounds early
Large seasonal batches are where thresholds get crossed unnoticed — model it before you order.
Loop in your CA
For anything near a limit, or for client gifts, get the treatment confirmed for your facts.
Ready to plan a round? Browse gifts by budget or open the corporate gifting app.
GST & tax on corporate gifts, answered.
Is GST applicable on gifts to employees in India?
Gifts from an employer to an employee up to ₹50,000 in value per employee in a financial year are not treated as a supply and so do not attract GST — this is set out in Schedule I of the CGST Act and confirmed by a CBIC press release dated 10 July 2017. Where the value exceeds ₹50,000 in the year, the gift is treated as a supply and GST applies.
Can a company claim input tax credit (ITC) on corporate gifts?
Generally no. Section 17(5) of the CGST Act blocks input tax credit on goods disposed of by way of gift, so the GST a company pays when buying gifts usually cannot be claimed back. This applies whether or not the ₹50,000 threshold is crossed. Your tax advisor can confirm the treatment for a specific arrangement, such as items that form part of an employment contract.
Are corporate gifts taxable in the hands of the employee?
Under Rule 3(7)(iv) of the Income-tax Rules, gifts in kind up to ₹5,000 in aggregate during a financial year are exempt for the employee; where the total value exceeds ₹5,000, it becomes a taxable perquisite. Gifts in cash, or vouchers convertible into money, are fully taxable regardless of the ₹5,000 limit.
What is the difference between the ₹5,000 and ₹50,000 gift limits?
They are two different taxes. The ₹50,000 limit is a GST rule — gifts from employer to employee below it are not a supply, so no GST. The ₹5,000 limit is an income-tax rule — non-cash gifts below it are exempt for the employee, above it they are a taxable perquisite. A gift can sit under one limit and over the other, so both are checked separately.
Are gift vouchers taxable for employees?
For income tax, a voucher that can be converted into money is treated like a cash gift and is fully taxable as a perquisite; a gift voucher for goods is treated as a gift in kind and follows the ₹5,000 rule. The GST treatment of vouchers is a separate and evolving area, so confirm the current position with your tax advisor for the specific voucher.
Are gifts to clients or business partners tax-deductible?
Business gifts may be claimed as a business promotion expense under Section 37(1) of the Income-tax Act when they are incurred wholly and exclusively for business, though large or personal-looking gifts can be questioned. Input tax credit on such gifts is still blocked under Section 17(5). Treat deductibility as a question for your accountant on the specific spend.
General information, not tax or legal advice · figures per the provisions cited above · confirm your specifics with a qualified advisor.