Meal Vouchers and Tax: Is There Really No Limit This Year? Seeking Advice!

Dear All,

As per the Income Tax Act, there is no ceiling on Meal Vouchers this year. Could you advise on the ceiling limit for meal vouchers to be given to employees?

Thanks and Regards,

Praveen

Hi Pravin,

As per the Income Tax Act, there is no ceiling on Meal Vouchers this year. Can you advise on the ceiling limit for meal vouchers to be given to employees? Is this accurate? Please share the reference point for this with us.

Previously or currently, it is Rs 50 per working day, totaling Rs 1500 per month. Some companies provide Rs 100 per day. Rs 100 seems reasonable. It would be wise to verify with the IT authorities.

Regards,
Rajat

Dear Rajat,

Please find attached the scan of one of the law reference books. We have cross-verified this with the Taxmann's journal and also with a Chartered Accountant.

Let me know if you have any clarifications to provide on the same.

Regards,
Praveen

I have uploaded the file again. Please see if you can open it. It is best to right-click and select "Save target as" - it works.

Regards,
Praveen

Hi! These are old limits. The current notification talks about a limit of Rs. 50 per meal; however, it also mentions the use of vouchers for food and non-alcoholic beverages during working hours. How can we ensure the vouchers are used during working hours? I have learned that the IT department has been issuing letters to some companies, inquiring about the steps taken to ensure compliance with the law when using meal vouchers. It seems the IT department is concerned about potential misuse of meal vouchers and aims to promote in-house canteens within companies, as evidenced by the reduction in the meal voucher limit in an inflationary economy.

In my opinion, companies could consider having in-house canteens, as many already do, and providing meal allowances electronically each month. If employees do not fully utilize the allowance within the financial year, they could be refunded the remaining amount as taxable income. This approach offers employees the flexibility to use the canteen, save on taxes by using it, and shields companies from legal issues. I am aware of companies that support organizations in implementing such systems.

Regards,

SM

In FY 2010-11, the meal vouchers or food coupons limit as tax-free is Rs. 1350/- per month, i.e., Rs. 16,200/- per annum.

To add to pon1965's comments, the allowance is per WORKING DAY. Hence, legal experts advise linking meal allowance to attendance of the employee rather than a fixed amount per month.

Please let me know if you need further assistance.