Gift Cards, Gift Vouchers, and Gift Certificates in India
The terms gift card, gift voucher, and gift certificate in India are used to describe a mode of transfer in the form of gifts, salary, or incentives (towards employees, friends, etc.). These options replace cash and allow the receiver to purchase services or products from specified places (malls, showrooms, bazaars, etc.) within a particular geographic location in India, as specified on the gift voucher.
These modes of transfer are commonly used by corporate bodies, employees, and individuals in the form of prepaid gift cards or gift vouchers for various beneficial reasons.
Gift Cards
Gift cards are a modern-day replacement for cash envelopes traditionally given as gifts during weddings and other ceremonies in India. These cards are typically used for shopping, dining, entertainment, and any other expenses the recipient may choose.
Gift cards are sold by several banks in India, including ICICI Bank, HSBC, KOTAK, YES Bank, SBI, HDFC, Axis Bank, and the Central Bank of India. These cards are backed by a bank guarantee and can be used in merchant outlets that accept debit cards. You can check the balance on these cards through ATMs. The identity PIN for the card is provided during purchase, and the card has an expiry date before which it must be utilized.
Gift Vouchers
Gift vouchers are certificates that entitle the holder to receive products or services of a specified value from a business (such as a hotel, shopping mall, or showroom). The specified amount is mentioned on the voucher itself, and the recipient can use it at applicable places where the voucher is valid.
Gift vouchers are commonly used by corporate bodies to pay employees’ salaries and incentives, as they offer tax savings. Like gift cards, gift vouchers also have an expiry date, and the recipient must use them before it expires.
Gift and Discount Coupons
Gift and discount coupons are provided by businesses on the purchase of certain products or services. These coupons usually come with an expiry date and work as discounts on future purchases. These coupons are an effective marketing tool for businesses to promote products, while also offering customers an incentive to purchase more.
Benefits of Gift Certificates
Gift certificates make it easier for holders to make payments for products and services without needing to carry cash. They also help reduce the cost of printing new notes for the government. With electronic technology integrated into the system, gift cards and certificates are more secure and traceable than cash payments.
For example, gift cards use PINs, and if lost, they can be blocked to prevent misuse. The taxation on such gift vouchers begins from a slab of Rs 5,000, making this payment method especially popular among corporate bodies (especially MNCs) in India.