Stuck with New Meal Voucher Limits: How to Handle Employee Concerns and Find Alternatives?

Came to know from my payroll agency as well as from my CA that there is a new ruling on meal vouchers limiting them to Rs 50 per meal. Spoke to the meal voucher provider, and they seem to be advising for more than one meal per day, and hence we can safely provide Rs 100 per day. My payroll agency as well as CA are saying that if a normal working day is of 8 hours (officially), how can you provide more than one meal a day? The meal voucher provider has denied providing a legal opinion on this that they used to provide earlier from credible legal firms.

Am stuck as I have already given my employees about Rs 100 per day, and this ruling is effective April 2009. I am terribly stuck! I don't want to tax the employees on meal vouchers in excess of Rs 50 that they have enjoyed as a tax-free perk since the beginning of this fiscal. Can anybody guide me on how you have been able to handle this without an employee irate? I want to solve this and am resolved to remove this perk from the next fiscal. Are there any other alternatives?

Hi Mr. Mishra, I am also in a similar situation and stumbled upon your thread. Hoping that you have found answers to the problem by now, would you mind sharing it with me?

Thanks in advance,

Vineeth Modon

There are lots of legal opinions present with the service provider to substantiate Rs 100/day. I am using Sodexo, and they have provided substantial support for the same.

Regards,
Gautam

Dear All,

I.T. rule 3(7)(iii),

(iii) 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.

There is no restriction on how many meals can be consumed each day. Two meals per day during working hours are considered reasonable. That's why many companies do not deduct tax up to 3000/- p.m.

pon

Do you agree with Pon1965? If there are eight working hours, for example, from 8 am to 4 pm, the company can provide breakfast and lunch. If it is a multi-shift company, it can offer lunch and dinner.

Additionally, as per Income Tax Rule 3(7)(iii), the term used is "Working Hours" and not "Normal Working Hours." This includes overtime working hours as well. This means that if someone stays late beyond normal working hours and works until 10.00 pm at night, they can avail three meals a day. However, if a company wishes to adopt this as a general policy, it should be clearly reflected in the company policy. Additionally, they must have a reliable attendance system to prove that all transactions are genuine. Otherwise, an amount in excess of Rs. 50 can be treated as a perquisite and taxed.

Regards, Sukhvinder Singh Bhatia