LONG TERM SERVICE AWARD TAXABILITY, Income Tax

[Mahendra L]

Kindly clarify about the following as I got two different rules as per I.T.Act 1961. (i.e) one from I.T Circular and another one from I.T.Manual

As per circular: For gift received in Cash / cheque from Employer is taxable in the hands of employee. Say, ₹ 50,000/- received by employee from Employer in the form of Cheque as 10 YEARS SERVICE AWARD.

As per I.T.Manual: For gift received in cas/ cheque exceeds ₹ 5,000/- is taxable. So, in this case, taxable will be

RS.45,000 (i.e. ₹ 50,000-RS.5,000)

Kindly clarify and state me the correct rules to be followed.

Thanks

Regards,

Mahindran.