Calculators · Before you issue, not after

Where does this recipient stand?

Two thresholds catch companies out, and both are cumulative across the financial year rather than per gift. Work out the position before you issue, not after.

Channel partner — Section 194R

For dealers, distributors, retailers, agents and other business recipients. Threshold is ₹20,000 cumulative per recipient per financial year; TDS is 10% on the full value once crossed.

Every voucher, gift, trip and free product to this one recipient since 1 April.

Threshold crossed, TDS applies
Already given₹5,000
Issuing now₹18,000
Cumulative this year₹23,000
TDS at 10% on the full amount₹2,300
Your total outlay₹25,300
TDS is due on the whole ₹23,000, not on the ₹3,000 excess. You deposit ₹2,300 from your own funds. The dealer receives ₹23,000 of value and you carry the tax as an additional cost.
If you miss it entirely, the cost is not 10%.
TDS not deducted₹2,300
Penalty, s271C₹2,300
Interest, s201(1A), 12 months₹276
Tax on 30% disallowance, s40(a)(ia)₹1,737
Total exposure₹6,613 (29%)
Illustrative. Interest assumes twelve months; the disallowance is taxed at roughly 25% plus cess. The s271C penalty is subject to a reasonable-cause defence under s273B and is not automatic.

Employee — gift exemption

For gifts, vouchers and tokens given to employees. The exemption is ₹15,000 per employee per year from 1 April 2026, up from ₹5,000. Cash gifts are fully taxable with no exemption.

Diwali vouchers, birthday gifts, spot awards — all occasions combined.

Within the exemption
Already given₹6,000
Issuing now₹5,000
Cumulative this year₹11,000
Perquisite value is nil. ₹4,000 of headroom remains against the ₹15,000 limit. This covers non-cash gifts only, so a cash gift of any size is fully taxable.

These calculators apply the headline rules only. They do not handle valuation of benefits in kind, sales discounts and rebates, non-resident recipients, the turnover tests for individuals and HUFs, or any of the edge cases that make real cases interesting. Treat the output as a prompt to call your chartered accountant, not as a substitute for doing so.

Doing this for four hundred dealers

A calculator handles one recipient. A register handles a network — running totals across every scheme and every issuing manager, with the breach surfaced at the approval step.

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