How much should you spend on Corporate gifts? | A guide for budgeting corporate gifts

Table of contents

• Corporate gifting is the new trend.

• Budget for corporate gifting.

• Why to create a budget for corporate gifting? How to control spend on Corporate gifts?

• Taxes on corporate gifting!

• Conclusion.

Corporate Gifting: A Strategic Tool

Corporate gifting is the best practice for incentivizing employees, and clients to increase the ongoing relationship, promoting a brand, and expressing gratitude. Corporate gifting goes beyond a simple exchange, it’s a very foxy strategic tool. Corporate gifting is not a new concept in the business field, it goes back to the previous century. It’s a powerful tool used to build and maintain positive relationships. Corporate gifts range from physical gifts like books, bottles, and pens to digital experience gifts. It is one of the best ways to appreciate an employee after a promotion. Corporate gifting can lead to long-term client relationships, which can cause retention. Corporate gifting is one of the best ways to introduce a company’s story or success in the existing industry. Corporate gifting drives overall success in some way or the other.

Budget for corporate gifting

Allocating a budget for corporate gifting is crucial. A budget for corporate gifting acts as a financial plan where a certain amount of money is allocated for purchasing gifts to be given to employees or clients to appreciate their contribution. It’s vital to allocate funds as it strengthens connections, promotes the brand’s positive image, and motivates employees. There are quite a lot of key components of a corporate gifting budget, like category-wise corporate gifts, which is the distribution of budget across different groups and designations, gift value ranges like allocating the spending limits to all the corporate gifts and the most important frequency of gifting which means that how often the employees would receive corporate gifts. By allocating a well-defined budget, firms, and companies can easily achieve their gifting gesture as well as their financial goals. Apsara gifts is one of the best platforms from Bangalore to get corporate gifts under budget, as we have been in for a decade in the business and are known for the quality, stylish, and affordable gifts. 

Why to create a budget for corporate gifting? How to control spend on Corporate gifts?

There are quite a lot of reasons for creating a well-defined budget for corporate gifting:

1. Budget control: 

First of all you should create or allocate a certain limit for corporate gifting, not only to avoid extra purchases for the company or firm but also to ensure that corporate gifting aligns with overall financial goals. It should be cost-efficient.

2. Strategies: 

 A budgeted corporate gifting plan helps to decide which employee or client would receive a higher-value corporate gift. It is a consistent gifting strategy across the firms. You can track the ROI (Return On Investment) of spending on corporate gifts by setting budget targets.

3. Easier gifting: 

There’s a long process in the gifting cycle - from planning to inventory, inventory to buying goods, buying goods to customizing, customization to delivery, and then packaging. Finally, to also track if the gifts are shipped on time. A Gifting budget makes it a lot easier for you to work with corporate gifts and the process is much more easier.

Taxes on corporate gifting!

There are taxes on gifts too. Tax on gifts in India falls under the purview of the Income Tax Act as there is no specific gift tax in India after the Gift Tax Act, of 1958 was repealed in 1998. Gifts up to Rs. 50,000 per annum are exempted from tax in India. In addition, gifts from certain relatives such as parents, spouses, and siblings are also exempted from tax. Gifts in other cases are taxable. For example, according to the Income Tax Act, money or movable/immovable property that an individual receives from another individual/organization without making a payment is termed a “gift”.

Thus, from the taxation point of view, gifts can be classified as:

•Monetary gift or money received in the form of cash, cheque, draft, bank transfer, etc.

•Movable property such as shares, bonds, jewelry, sculptures, paintings, etc. This also includes movable properties received at a reduced price/less than their fair market value.

•Immovable property like buildings, lands, residential/commercial properties, etcetera. This also includes immovable properties acquired at a reduced price/less than its stamp duty value.

(Reference - Paisabazar)

Conclusion

Corporate gifting is more than just giving an item or gift, it’s a strong strategic tool to strengthen relationships and create a positive body image and employee confidence. A well-defined chosen corporate gifting budget acts as a tool, by allocating funds, firms can appreciate, and create long-lasting impressions. Flexibility in allocating funds in the firm is essential in building a business.