Why gift cards are a smart spending tool Gift cards are like prepaid wallets, and they give you a set amount of money for shopping, dining, or travel. Preloading a card with money makes you less likely to overspend because once the balance is depleted, you cannot spend any more money without reloading it. For chronically overspending people, this prepaid form acts like an internal budget restricting mechanism.
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Earning rewards and cashback A number of websites and payment wallets also offer cashback, discounts, or rewards when you purchase gift cards of popular brands. For example, an e-gift card of ₹5,000 might cost you ₹4,750 if purchased during a festival sale, giving you an immediate saving. You can then redeem these rewards to make subsequent purchases, which will lower your overall expenditure.
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Using gift cards for business tax benefits For salaried employees, employer-provided gift cards can also be a effective tax-saving perk. Under current Indian tax laws, gift vouchers or cards up to ₹5,000 every year are tax-free if offered by an employer. A sum greater than this will be taxed based on your tax slab, but within this limit, it is advisable to receive benefits without increasing your taxable income.
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Planning purchases ahead Gift cards are prepaying for expected expenses. For instance, if you can expect to be buying electronics during Diwali, you can buy gift cards for brands cheaper months ahead. It guards you against price hikes and ensures you have already reserved money for the purchase.
Preventing misuse and expiry loss Though gift cards are convenient to use, they are typically subject to expiration, between six and twelve months. Track expiration dates and spend the balance before it runs out. Also, keep them secure — electronic cards should be saved in a secure email or wallet app, and paper cards should be treated as cash.
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Including gift cards in your budget plan You can fit gift cards into your monthly budgets. Save a set amount per month in the form of store-specific gift cards for gas, groceries, or dining out. This will prevent you from going over budgets in these areas and will also give you chances to take advantage of offers valid at the time of buy.
