Are Sodexo Meal Coupons Taxed for the Financial Year 2009-2010? Seeking Clarification

Hi all,

Please let me know if the Sodexo meal coupons are taxed in the AY 2010-2011 (for the F.Y. April 09 to March '10). We give out meal coupons worth Rs. 1100 per employee.

Thanks,
Anupama

Hi all,

I had emailed Sodexo regarding the meal voucher limit. Attached is the response I received from them. I hope this information will be helpful to everyone.

Hi,

Can the company providing free meals to employees also offer meal vouchers at the same time? Please guide me.

Nivas.

Yes, you can issue meal vouchers that can be used in select restaurants, departmental stores, etc. The limit is INR 1350 per month for tax exemption.

IT Rules for Meal Coupons

There are two rules of IT Rules which should be considered here:

Rules (3)(7)(iii)

As per the rule, generally, meal coupons provided to employees are tax-free, provided the payment per meal is limited to ₹50. The maximum amount per month may also be capped based on the number of working days; it should be non-transferable and usable only at eating joints.

Sodexo coupons can be used not only at eating joints but also at places like supermarkets and hence are taxable under this provision.

Rule 3(7)(iv)

As per Rule 3(7)(iv), if such gifts are given extraneous to the salary and their value is below five thousand rupees, then they are tax-free.