Kolkata: This Diwali Indians have spent a lot. From the big cities to rural India, many have loosened their purse strings like never before, show data from all India trader bodies. The GST rejig has helepd the splurge as has the significant income tax reliefs from April 2025 that has placed significant amounts of cash in hand of a lot of salaried people.
Many have recieved a lot of gifts as well as given a lot. And some of these gifts were of high value. Do you have any idea whether Diwali purchases are tax-exempt? If you receive gifts from friends and relatives are they tax-free? How are taxes charged on any Diwali bonus that might have come your way? Let’s have a look.
All marketers have made significant sales be it apparel, or accessories, or jewellery, or consumer electronics or food stuff. Diwali represents the peak of the shopping seasons in India. Many consumers wonder whether Diwali-related expenses qualify for tax benefits.
Tax rules
No individual can claim any tax deductions on general festive purchases. If you are buying items for your or family’s consumption, there cannot be a tax exemption in India. Under Section 56 of the Income Tax Act, gifts received from relatives, including a person’s spouse, siblings, siblings of a spouse, and siblings of a parent, are exempt from taxes. The income tax rules have been made clear on the website of the Income Tax department and anyone can check them.
Tax exemption limits
Gifts received from non-relatives become taxable after a certain limit. If the value of the item gifted Rs 50,000 in a particular financial year, they become taxable. The same become applicable for HUF (Hindu Undivided Family) too. The value of the gifts will be considered taxable income. If the value of gifts received during a year exceeds the level of Rs 50,000, the total amount of gifts received during the year will be taxed, says the rules.
Diwali bonus
Any bonus received during Diwali or any other occasion is fully taxable at the slab rate of an individual. If you are fortunate to receive a bonus on Diwali, the Income Tax department will treat it as part of the annual compensation and it will be taxed accordingly.