Gifting for Employees in India: Policy, Tax Rules & Vendor Tips Every HR Should Know
Gifting for Employees in India: Policy, Tax Rules & Vendor Tips Every HR Should Know
Explore Corporate GiftingKey Takeaways
-
Know the Rules – In India, employee gifts worth up to ₹5,000 annually are tax-exempt; exceeding the limit may trigger taxable benefits.
-
Plan Ahead – Create an annual gifting calendar aligned with festivals, milestones, and recognition moments.
-
Prioritise Personalisation – Customised gifts, like printed chocolates in keepsake boxes, create lasting impressions and boost brand recall.
-
Measure the Impact – Track ROI using engagement surveys, retention data, and social media visibility.
-
Choose the Right Vendor – Partner with experienced, reliable suppliers who can deliver quality, compliance, and creative options.
Introduction – Why Employee Gifting is More Than Just a Gesture
For Indian businesses, gifting for employees isn’t just a feel-good activity during festivals like Diwali or New Year — it’s a strategic move to boost morale, enhance brand culture, and strengthen retention. A thoughtful gift can make an employee feel valued; a careless one can feel like a tick-box exercise. But here’s the catch — in India, gifting also comes with tax implications, GST rules, and HR policy considerations that companies can’t afford to ignore.
Whether you’re an HR manager planning festive hampers, a CEO considering reward programs, or a marketing head designing a culture initiative, this guide will help you create an employee gifting strategy that’s both memorable and compliant. And yes — we’ll also share how premium, personalised corporate gifts from ChocoCraft can make your gesture unforgettable.
-------------------------------------------------------------
Why Employee Gifting Matters for Business Success
Research from Deloitte shows that organisations with strong recognition cultures have 31% lower voluntary turnover. Gifts, when done right, are a tangible expression of appreciation.
Key benefits of employee gifting include:
- Recognition & Motivation – A personalised New Year hamper can be a morale booster.
- Culture Building – Diwali gifting traditions create a sense of belonging.
- Brand Loyalty – A well-branded gift keeps your company top-of-mind.
- Retention – Employees who feel valued are more likely to stay.
For example, a Bengaluru-based IT firm switched from generic mugs to customised chocolate gift boxes with employee names from ChocoCraft. The result? A spike in social media shares and an unexpected boost to their employer branding efforts.
Premium Corporate Gifts with Logo Chocolates
Make a lasting impression on clients and employees with personalized chocolate gift boxes that reflect your brand.
Explore Now-------------------------------------------------------------
Building an Employee Gifting Policy – The Framework
An employee gifting policy ensures that the process is transparent, equitable, and compliant. Here’s what you should include:
Define Purpose & Occasions
List the occasions when gifts will be given — e.g., Diwali, New Year, work anniversaries, or performance milestones.
Set Budget & Approval Process
Budgets should align with company size and gifting frequency. Corporate gifting spend in India typically ranges from ₹500–₹5,000 per employee per occasion.
Compliance & Tax Considerations
In India, employee gifts up to ₹5,000 in a financial year are exempt from income tax (as per Section 17(2) of the Income Tax Act). Anything above is taxable as perquisite. For official guidance see the Income Tax Department (no follow).
Vendor Selection Guidelines
Clearly define quality expectations, delivery timelines, and branding requirements. This ensures consistency across teams and locations.
Compare vendors by product range, customization, logistics, and feedback before choosing. Read more →
-------------------------------------------------------------
Tax & GST Rules for Employee Gifting in India
Income Tax Rules
- Gifts in cash are always taxable.
- Non-cash gifts up to ₹5,000 per financial year are tax-exempt.
- Above that limit, the excess is added to the employee’s taxable salary.
GST Implications
GST is applicable if gifts are given without consideration and exceed ₹50,000 in value per employee annually. Gifts to employees are considered a “supply” under GST if linked to employment.
Pro Tip: Keep a proper register of all gifts given with their value and recipient details — this makes audits smoother.
-------------------------------------------------------------
Choosing the Right Gifts – Practical Tips
Selecting gifts is where art meets strategy.
Checklist for HR & Admin Teams:
- Personalisation – Names, photos, or company logo (ideal for keepsake items like corporate gift for employees).
- Utility – A gift employees can use daily gets more brand recall.
- Packaging – Premium packaging elevates perceived value.
- Cultural Sensitivity – Ensure gifts are appropriate for a diverse workforce.
Select an agency that offers full customization, mockup previews, and reliable delivery. Read more →
-------------------------------------------------------------
Vendor Tips for Stress-Free Corporate Gifting
Look for Proven Track Record
Vendors like ChocoCraft that specialise in premium customised corporate gifts understand branding, bulk logistics, and on-time delivery.
Request Samples First
Never finalise an order without physically seeing product quality and packaging.
Ask About Branding Options
From engraved wooden boxes to printed chocolates, branding turns a gift into a marketing tool.
Check Nationwide Delivery Capability
If your company has offices in multiple cities, you’ll want a vendor who can deliver across India without delays.
-------------------------------------------------------------
Real-World Case Study – From Generic to Premium
A Delhi-based fintech company previously sent basic diaries as corporate gifts for customers and employees. In 2024, they switched to 12-piece printed chocolate boxes from ChocoCraft, each with a customised greeting and the recipient’s name.
Outcome:
- 40% higher engagement on LinkedIn posts
- Positive internal survey feedback
- More referrals during campus hiring season
Branded Corporate Gift Box
Custom-branded chocolates tailored to showcase your company identity perfectly.
Customize Yours-------------------------------------------------------------
Mistakes to Avoid in Employee Gifting
- Last-Minute Planning – Leads to poor choices and higher costs.
- Ignoring Tax Rules – Risk of penalties and unhappy employees.
- Low-Quality Products – Damages brand perception.
- One-Size-Fits-All – Personalisation matters.
You can explore more tailored approaches in our guide to corporate gift suggestions by personas.
-------------------------------------------------------------
Strategic Timing for Employee Gifts
While festivals remain the most common occasion, think beyond the obvious:
- New Year Gifts – Great for starting the year on a positive note. See ideas: New Year & Christmas corporate gifts.
- Work Anniversaries – Reinforces loyalty.
- Project Completions – Celebrates teamwork.
More seasonal ideas are covered in our blog on corporate gift options for 2025.
-------------------------------------------------------------
External Insights on Corporate Gifting Trends
- Harvard Business Review — What Makes a Gift Meaningful — Personalisation significantly increases the perceived value of a gift.
- Statista — India corporate gifting market size — India’s corporate gifting market is projected to exceed $6 billion by 2025.
- Economic Times — Corporate gifting market growing — Diwali remains the largest corporate gifting season, accounting for a significant share of annual spend.
- Forbes — Corporate gifting trends — Sustainability and wellness gifts are on the rise.
- Mint — Diwali gifting trends — Experiences and premium consumables are replacing generic items.
-------------------------------------------------------------
Employee Gifting Trends in India 2025
The corporate gifting market in India is projected to touch ₹1,50,000 crore by 2025, with a significant chunk dedicated to employee gifting. The pandemic accelerated a shift towards personalised and wellness-oriented gifts — from custom chocolates to branded work accessories. According to an Economic Times report (nofollow), HR managers now seek gifts that are memorable, align with company culture, and offer emotional resonance. At ChocoCraft, for example, a personalised corporate gift for employees with printed chocolates and a keepsake box delivers both delight and brand recall. The key trend: personalisation at scale.
Cultural & Festive Context for Employee Gifting
In India, gifting is more than a transaction — it’s a deeply cultural practice that builds relationships. Festivals like Diwali, Holi, and New Year are peak seasons for HR teams to boost morale through thoughtful presents. A corporate Diwali gift is often seen as a token of gratitude, while year-end gifting marks a fresh start. Beyond festivals, companies increasingly mark work anniversaries, birthdays, and milestones with gifts. This cultural integration not only strengthens bonds but also makes employees feel genuinely valued — a critical driver for retention.
Premium Corporate Gift Box
Stylish and elegant chocolate boxes crafted to leave a lasting impression on your clients.
Explore Now-------------------------------------------------------------
How ChocoCraft Personalises Employee Gifts
With over a decade of experience in premium printed chocolates, ChocoCraft has transformed employee gifting into a branding opportunity. Companies can print logos, employee names, or motivational messages directly on chocolates, housed in elegant wooden boxes. Whether it’s a 6-chocolate box with a single printed chocolate for a quick recognition moment, or an 18-chocolate luxury set for festive occasions, the gifts are tailored to the company’s style and budget. This combination of edible delight and keepsake presentation elevates the act of gifting into a memorable brand experience.
-------------------------------------------------------------
Common Mistakes to Avoid in Employee Gifting
Even well-intentioned gifting programs can backfire if not executed thoughtfully. Common pitfalls include:
-
Ignoring Tax Compliance: Misunderstanding the ₹5,000 tax-free gift limit in India can cause payroll headaches.
-
Generic, Low-Quality Gifts: Items with no personalisation often feel impersonal.
-
Overlooking Cultural Sensitivity: Avoid gifts that may unintentionally offend.
-
Last-Minute Planning: This often results in rushed purchases and missed branding opportunities.
Instead, work with reliable vendors early — explore options like corporate gifts by budget — and ensure gifts are both meaningful and compliant.
-------------------------------------------------------------
Conclusion
Gifting for employees in India isn’t just about giving something during Diwali — it’s about creating emotional connections, recognising contributions, and strengthening your employer brand.
With the right policy framework, tax compliance, and vendor partnerships, you can ensure your gifting program is memorable, compliant, and aligned with your company culture.
So, the next time you plan your gifting calendar, remember: A personalised gift says, “We see you, we value you” — and that’s a message employees never forget.
Ready to delight your team? Explore ChocoCraft’s collection of customised corporate gifts and create something unforgettable this season.