Is Food Coupon like Sodexo coupons which are very famous given by employers to employee. Most of time employers and employee are not aware of taxability of food coupon and assume they are exempted.

Rule (3)(7)(iii) dealing with such perquisites says

‘The value of free food and non-alcoholic beverages provided by the employer to an employee shall be the amount of expenditure incurred by such employer. The amount so determined shall be reduced by the amount, if any, paid or recovered from the employee for such benefit or amenity:

Provided that nothing contained in this clause shall apply to free food and non-alcoholic beverages provided by such employer during working hours at office or business premises or through paid vouchers which are not transferable and usable only at eating joints, to the extent the value thereof in either case does not exceed fifty rupees per meal or to tea or snacks provided during working hours or to free food and non-alcoholic beverages during working hours provided in a remote area or an off-shore installation.’

The Rule says Food coupons or meal vouchers are tax exempt up to a limit of Rs 50 per meal. Such a meal voucher issued by a company to its employee should be used only during working hours and is restricted to two meals per day. It is very important to understand that one has to consider the working hours of the organization to calculate the tax-free amount of this perquisite. The Paid vouchers must be Non Transferable and usable at eating joint only.  If such coupons are used at places other than waiting joints then the value of coupon received by employee is not tax free.

This works to Rs 100 per working day, as it's generally assumed that an individual would have two meals during a working day. Let's assume that if an employee consumes two meals a day using meal vouchers in a working day and works for 25 days in a month, then meal vouchers can be tax exempt only to the extent of Rs 2,500 per month (Rs. 50 per meal x 2 x 25 days). Now meal can be either breakfast, lunch or dinner. It's also important to note that the meal vouchers issued to employees are non-transferable and should be used at restaurants and other eateries. A lot of retail outlets now accept food coupons as payment for groceries. Here are a few lines directly taken from the Income Tax Act, which covers provisions relating to food coupons or meal vouchers. "Provided that nothing contained in this clause shall apply to free food and non-alcoholic beverages provided by such employer during working hours at office or business premises or through paid vouchers which are not transferable and usable only at eating joints, to the extent the value thereof either case does not exceed fifty rupees per meal or to tea or snacks provided during working hours or to free food and non-alcoholic beverages during working hours provided in a remote area or an off-shore installation."
 

Also read related article: How to Pay Zero Tax for Income up to Rs 10 Lakhs by CA Chirag Chauhan

If you like my article, please share this on :


Search Professional Post Query Post Assignment Read More Articles

In case of business query on above subject, comment here or contact One Roof Consultant




article author Sukeahu
Posted On:  1 year ago

Very nice information, thanks for sharing. I get ticket restaurant meal vouchers every month which is directly credited to my meal card. Nice tool to save tax. Thanks www.edenred.co.in Regards Shamun


article author Nilesh
Posted On:  1 year ago

We are using prepaid meal card service - ticket restaurant meal card for our company which is pretty good and hassle free. Happy to implement in our organisation. Visit and Bring Edenred on board http://www.edenred.co.in/ Regards, Nilesh HR Manager


article author

One Roof Consultant

Tax Expert
Tax solutions provider , One Roof Consultant



CHECKOUT TRENDING ARTICLES


  • How to Pay Zero Tax for Income up to Rs 12 Lakhs from Salary for Financial Year 2016-17

  • Do not wait till 31st July to file your Income Tax Return – Keep Ready 9 documents to file before due date

  • Missed to Submit HRA declaration to Employer? You can claim HRA at the time of Filing Returns and get Refund from Income Tax

  • Features and Step wise process - Income Declaration Scheme 2016 – Convert your Black Money to White

  • How to Pay Zero Tax for Business Receipts -Turnover of Rs 1 Crore

  • How to Pay Zero Tax for Professionals (CA, CS, Lawyers, Doctors, etc) earning Income of Rs 16 Lakhs

  • Why you should file Income Tax Return? Benefits of Filing Income Tax Returns

  • How to save Rs 10 crore as retirement corpus

  • Having Turnover of Less than 10 Lakhs? How to File NIL Service Tax return with Circular No 033/2012

  • Starting a New Business or Profession? Compare Structure and type of Entity– Sole, Partnership, LLP or Company

  • Revised and Latest TDS Tax Deducted at Source Rate Chart for FY 2016-17 AY 2017-18

  • Exemption for Capital Gain Arising on Transfer of Resident House Property

  • WILL- Important points, Tax Advantages of will and Format of WILL

  • Revised and Latest TDS Tax Deducted at Source Rate Chart for FY 2016-17 AY 2017-18

  • Exemption for Capital Gain Arising on Transfer of Resident House Property

  • WILL- Important points, Tax Advantages of will and Format of WILL

  • Senior Citizens Tax Benefits in Income Tax Act - Filing, exemptions, advance tax and other benefits

  • Registration process for Trade Mark


  • GET FREE ARTICLE UPDATES VIA EMAIL

    Always stay updated with latest information on expertmile

    I hope by reading this article you got enlighten on ,Food Coupon Meal Vouchers Income Tax Benefit under Salary IncomeFood Coupon Meal Vouchers Income Tax Benefit under Salary Income?, Taxation for Sodexo coupons ?, Food Coupon Meal Vouchers Income Tax Benefit under Salary Income, further to mention before taken any financial decision based on this content it is prefered to take an expert opinion as matter can be subjective.