Are Meal Vouchers Part of Taxable Income? Seeking Clarity with Examples and References

Dear Members,

I kindly request clarification on whether meal vouchers offered to employees by the employer as part of the salary are exempt from taxable income or not. I would appreciate a response with references and examples.

Finally, I would like to thank and appreciate the founders of this forum for providing it as an effective platform for the HR fraternity.

Regards,
Ravikanth

Hi,

If you offer meal cards as part of the salary, it will be taxable. However, if you offer them separately from the salary, they are exempt from tax.

Dear Sashi,

It seems you have posted this request by mistake in this section of CiteHR. Please post your request in the relevant section.

Regards,
Ravikanth

The meal vouchers are exempt from tax provided they are used only for meals in the company. However, Fringe Benefits Tax (FBT) is applicable for them.

Thank you.

Meal vouchers, if part of the salary, are fully taxable. They should be in addition to the salary, usually up to Rs. 1000 per employee. In this case, then Rs. 12,000 a year will be tax-exempt.

Meal vouchers are exempt from tax as of now, whether they form a part of the salary or not. The limit can go up to Rs 3,000 per month.

I think all of us have given our opinions. What you can do is talk to the Regional Manager at Sodexo in the Ahmedabad region, Mr. Bala. When you call him, you can tell him that I have given you the reference. They are in this business, and he will tell you all the facts.

Hi,

MEAL VOUCHERS:
Income Tax: 100% exemption for the employee.
FBT: 100% exemption for the employer.
As this is a meal voucher, it is advisable to make the calculation on a daily allowance basis. Though there is no upper cap for the meal allowance, the vendors recommend Rs. 75 per working day.

Regards,
Mou

Hi,

Meal vouchers are not taxable. There is no limit specified under the Income Tax Act, but an amount should be "considerable." You may go up to Rs. 75/- per day. It is also exempted from Fringe Benefit Tax.

Regards,
Sanjay Shende

Hi Anuja Mehta,

Meal vouchers are exempt from tax. There is no limit per month; they are completely exempt. I would appreciate it if you could please reply.

Thanks,
Kuwar

Hi,

According to section 115WB of the Income Tax Act, "any food or beverages provided by the employer to the employee within the office premises, factory, or through paid vouchers which are non-transferable and usable at eating joints or outlets, are exempted from tax".

The taxable income per employee can be calculated up to INR 15,000 per annum, i.e., INR 1,250 per month (calculate only working days).

This is the information I have regarding meal vouchers. This does not incur any Fringe Benefit Tax (FBT).

Thanks & Regards,
Naveed.

Meal Vouchers are paid vouchers, given every month of salary as tax free to employees
Meal Vouchers exempted from tax as below -
Fringe Benefits Tax - 100%· exemption for the employer
Income Tax - 100% exemption for· the employee.
example - If your employees opt for Sodexho Meal Vouchers @ Rs. 40/- per working day (depends on salary) instead of cash in their salary the tax they will save on Rs. 12,480 i.e (Rs. 40/- x 26 days x 12 months) no tax on Rs. 12,480 rs
As such there is no cap limit for the meal allowances but recommended Rs. 75 per working day
Ticket Restaurant Meal Vouchers can be used as a mode of payment for purchase of food items and beverages. Typically one can use them at Restaurant, Sweet shops, Bakeries, Fast Food & to purchase groceries.
Javed hussain

Hi,

As per the latest income tax rules (CBDT Notification No. 313 dated September 25, 2001), an organization can provide free or subsidized meals to its employees. This provision ensures that such benefits will not be considered as a perquisite, thereby exempting them from income tax in the hands of the employees. Additionally, these meal expenses are fully tax-deductible for the company as a legitimate expense.

The meal subsidy can also be offered to employees in the form of paid vouchers that can be exchanged for food and beverages.

Thank you

From the assessment year 2006-07, the value of this prerequisite is nil as it is chargeable to fringe benefits tax. Up to the assessment year 2005-06, these were taxable except in the following cases:

1. Free meals provided by the employer during office hours at the office or business premises.
2. Free meals provided through non-transferable paid coupons to be used as eating points up to Rs. 50 per meal.
3. Tea and snacks provided during office hours.
4. Free meals provided during working hours in a remote area or an offshore installation.

Thus, as of the current date, these are not taxable.

Hope the position is amply clear.

DEEPAK THUKRAL
CHANDIGARH

Hi Umesh,

One can save Rs. 1300 a month or Rs. 15600 per year through Food/Meal Vouchers. These kinds of expenditures are part of the employee's CTC. The company may issue meal vouchers that can be consumed by the employees every month. It's a practice to save on your earnings.

Further, if anything else comes to your mind, feel free to write.

With warm regards,
Umesh
(welcomeumesh@yahoo.com)

Meal vouchers are exempt from income tax and fringe benefit tax. The maximum per working day is Rs. 50. Working days are calculated as 24 days. 24 days * Rs. 50 = Rs. 1200 per month. Companies can give out passes of more value, but any amount beyond Rs. 1200 per month is taxable. Usually, this is taken as a part of CTC to save on income tax.

Hope this helps.

Sneha

Hi,

Meal vouchers are exempt from tax/FBT for employers as well as employees. However, there is a service tax that could be deducted from the employees. The eligibility is up to Rs. 24,000 per annum.

Regards,
Koshy Varghese

Hi, it is Rs. 50 per meal or per day. Rs. 50 is fine for organizations working from 9.30 to 6.00 P.M. What about BPOs or financial organizations that have different shifts? For example, assume the shift timings of a company start from 6.00 a.m to 2.00 p.m. The employee starts his office by 5.00 a.m. Whether the organization provides him meal vouchers for breakfast, snacks, and lunch: i.e., Rs. 50+50+50=150. Is there clarity on what food has to be bought? Whether this meal voucher can be used to buy raw food like rice, oil, vegetables, meat to cook or should be used for readily edible items like hotel food, bread, biscuits, etc. It says non-transferable: Is there any name written of the holder or any signature to be done.

Hi,

The maximum an employee can save in IT is Rs. 15,600 a year. There are two ways of saving this: either start collecting your bills until the end of the year and submit them to the accounts/commercial/finance department of your organization, or when your organization is partnered with a restaurant, Sodexo passes, or any other mode, the company issues coupons every month which employees redeem when using them. In such cases, the organization saves on the IT showing it as a canteen expense or staff welfare, etc. This year, I also saved Rs. 15,600 in IT.

Thanks and have a great weekend,
Umesh
(welcomeumesh@yahoo.com)