Perquisites Taxation, Income Tax

[Tax Tycoon]

I received 6000 amazon gift card as reward which was included u/s 17(2)(viii) and tax was deducted on entire 6000. I informed payroll team to make 5000 as nil and include remaining as taxable income. They denied to do that also refused to change in Form 16. During ITR I will make 5000 as nil it would trigger an alert right?

Posts / Replies

[DR.MARIAPPAN GOVINDARAJAN]

While filing return you may indicate the taxable income.  

[Tax Tycoon]

So I can reduce taxable income. Gift card value 6000. E.g if taxable income is 516000 I will change it as 511001 (4999 excluded as per Rule 3(7)(iv)).  

[DR.MARIAPPAN GOVINDARAJAN]

Ok. You have to show the entire income and  to indicate the gift amount as exempted income in the return.

[Tax Tycoon]

Where I need to mention 17(2)(viii) during ITR I mean do we have such provision?

[DR.MARIAPPAN GOVINDARAJAN]

Since in Form 16 it was mentioned as Rs.6000/- you cannot make it as Rs.5000/-.  TDS was recovered for the entire Rs. 6000/-  As per Rule 3(7)(iv) the exemption is up to Rs.5000/-. If the gift exceeds Rs.5000/- the entire amount is liable for taxation and your employer rightly deducted tax at source for the entire amount.  It is my view.

[DR.MARIAPPAN GOVINDARAJAN]

Please ignore my second view. 

[Tax Tycoon]

But beneficial interpretation must be liberal 4999 must be nil anything above must be taxable.

Many sources confirmed the same. I am unable to include screenshots.