rambabu wrote:
I have done it. When I was selected for the prestigious Award known as Jawahar Award a famous award popular in PSU steel plants for saving a substantial amount to the company, I refused to accept.. Because of the heavy taxes imposed on such awards.
Would the tax exceed the reward? The tax is definitely not 100% or more. It is maximum 30% plus education cess. You lose more by refusing award rather by paying tax. Is it better to pat 30% tax or forego entire 100%. I don't understand the logic. Hope you will elucidate. There is only one condition when you may refuse. It may be that you get award in shape of some non financial asset like Motor car but you don't have cash to pay rax. I came across some person who won lottery of a motor bike. This was taxable. He paid tax to the lotter manager as a way of TDS and got the bike. I got him refund of income tax by filing his return showing total income including that of motor cycle lottery. .
I view things in a different way. For a A Gift given to my daughter, I will not demand anything from her. The same thing applies to the corporate gifts as far as I'm concerned. A gift in true sense is a token of love or loyalty or anything as the case may be without any strings attached.
The govt. does not give gift but only imposes tax on a gift that you receive from some source. By the way, gift received from father is not taxable as this is from blood relation. But if you receive gift freom corporate or elsewhere, this is taxable. Here the donor is not getting back anything. Only this is subject to tax. If this is thinking, you need not receive anything- even salary- which is subject to tax.
Agreed sir. But that is salary and this is named as GIFT. When I receive my salary i can understand that my salary is subject to taxes. And I also understand that I'm bound to pay taxes. There is no confusion about the Income tax on my salary.
Please also remove confusion on taxability of taxes. For govt, a gift is alo income. If all gifts were made tax free, people would simply give each other only gifts so that there would be no tax. I remember that once, gift to wife was taxable but not other gifts. So many began gifting others' wives on reciprocal basis. a would give gift to B's wife and B would give gift to A's wife. So all that became tax free. Taxation is a financial issue and so we should see this from that angle. I agree that donor should give gift unconditionally. But the govt. will recieve a part as tax.
Absolutely there is no confusion about Taxes. And I know Taxation is a financial issue.I worked in PSU for 25 years and took voluntary retirement on personal grounds. I am very much used to Taxes deducted at the source in my bank My department issues form 16.
Because i know a corporate gift is also taxable this is the aspect that I did not like it. When I saved lakhs of rupees to my organization through my innovative works my organization gave me gifts as a token of my exemplary contribution. It is only then I came to know this gift given to me is taxable. Since then I started refusing all the gifts given by my organization. Because i felt since it is given as GIFT it should be tax free. My Officers also said what you said now. Then I asked if I refuse will it be taxed. They said no. Then I refused such gifts. Not one but many.
