Neutral impactEconomy
Diwali bonus: Will your festive payout be taxed? What salaried employees need to know
Mint 1 hr ago·15 Oct 2026, 2:22 pm
Diwali bonuses from employers are treated as part of your salary and are taxed at your standard income tax rate. This means the payout is added to your total earnings for the financial year, and the applicable tax slab determines how much you pay. For most employees, this is a straightforward process, but it is important to remember that the bonus is not tax-exempt simply because it is given during the festive season.
The taxability of gifts is a common point of confusion. Generally, gifts from employers are taxable. However, there are specific exemptions. If you receive a gift from your employer on a special occasion like Diwali, and it is within a prescribed monetary limit, it may be exempt from tax. To ensure you are compliant, you must include this income in your annual tax return. It is always wise to consult a tax professional for advice on your specific situation.
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