Meal Vouchers and Income Tax: How Much is Really Exempt for Employees?

Dear All,

As per the notification referred by me, meal vouchers issued to employees for any amount (no maximum limit) are exempt from FBT for the employer. However, it is not specified up to what amount it is exempt from Income Tax in the hands of an employee. Could someone provide some insight on this with supporting evidence or notifications?

Regards,
Jossy

Jossy,

I cannot give you any proof right now, but coupons issued up to Rs. 1300 per month are exempt from tax to the best of my knowledge.

Meal allowance in the form of vouchers or coupons (Sodexo, etc.) is tax-free for employees. As per the income tax rules, up to Rs. 50 per meal per day is tax-free. However, the number of meals in a day is not mentioned. So, it's safe to provide meal coupons up to Rs. 2500 per month.

Regards,
Amit

Hi Amit, laws formulated are based on logic when it comes to interpretations, especially true when fighting a court battle. The current law states Rs. 50 per meal and also specifies during WORKING HOURS. One cannot assume anyone can have more than one meal during office hours, hence an upper limit of not more than Rs. 1300 per month.

Additionally, 10-15% of the employees would be on leave or traveling (where they enjoy tax-free reimbursement of food bills). In that scenario, I would suggest not more than Rs. 50 per WORKING DAY. This should be calculated based on the attendance of the employee.

It's quite complicated, isn't it? But companies that have taken legal opinions rather than relying on marketing gimmicks of voucher companies have started linking attendance to meal allowance. Talk to your legal expert if you want to issue a flat amount exceeding Rs. 1300 per month. All the best!