Hi Suhrita,
Every employee can enjoy tax-free Sodexho Pass Gift Vouchers.
However, gifts given would attract a Fringe Benefits Tax on the corporate at the rate of 6.7%(approximately) of the gifting volume.
No FBT on employer
The definition of ‘Fringe Benefit’ under the new chapter XII H (As per subsection (2) of section 115 WB of Income Tax Act, 1961), excludes-
1. Expenditure on, or payment for, food or beverages provided by the employer to his employee in office or factory;
2. Any expenditure on or payment through paid vouchers, which are not transferable and usable only at eating joints or outlets.
In this section, exemption has been granted completely for paid vouchers provided to the employees. Hence there is No FBT on employer on Sodexho Pass meal vouchers given to employees.
Tax free for employees
With the shifting of tax liability on employer from employees in respect to certain fringe benefits, these fringe benefits, which were hitherto taxable in the hands of employees as perquisite, will no longer be taxable in their hands. Thus those items now chargeable to tax under FBT (Chapter XII-H) have been deleted from Rule 3, which dealt with valuation of perquisites in the hands of the employee. Paid Vouchers being one of the items.
Further, Rules for valuation of perquisites have been amended and clause (vi) has been inserted under Section 17(2) vide notification no. 68/2005 dated 28th February, 2005, as follows:
(2) “perquisite” includes-
(vi) the value of any other fringe benefit or amenity (excluding the fringe benefits chargeable to tax under Chapter XII-H) as may be prescribed:
Since, paid vouchers have been covered under chapter XII H and are also not a prescribed perquisite for valuation they will not be taxable in the hands of employees.
Regards
Pavan