A PIL is being filed to avoid tax evasion through Meal Coupons. Has anyone received Income Tax notice for audit of Sodexo coupons?
Following is the email send to IT Department and charges raised in PIL:
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Dear Sir/Madam,
This is with reference to Meal Allowance paid through salary to employees in India.
Meal allowance in salary is tax exempt component and therefore many companies give food coupon to employees. Ideally it is to be used for ready to eat food and for meal taken in office (or nearby office within working time).
However, the coupons are grossly misused to create parallel currency.
· The coupons are redeemed without signature of the beneficiary. Thus, the usage becomes untraceable. And some vendors rotate/exchange the coupons as parallel currency. Is this legal? If not, why IT Department is silent on this?
· How can grocery stores and malls accept such coupons if the allowance is for ready to eat Meal? Isn’t this illegal to claim tax benefit for shopping groceries?
· How can the coupons be redeemed in bulk? The exemption is for Rs 50 spent every day on meal.
Income tax department must issue notice to such food coupon vendors (Sodexo, Ticket Restaurants) to explicitly make these points clear to their customers. Also the redeemed coupons should be checked randomly to confirm signature at the back of the coupon. Companies should also be mandated to record the use of coupons since they claim income tax exemption for their employees on the basis of these coupons.
Millions of employees and their employers grossly misuse the benefit of Meal Allowance to avoid tax. IT Department is requested to act and stop this tax fraud.
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Following is the email send to IT Department and charges raised in PIL:
-----------------------------
Dear Sir/Madam,
This is with reference to Meal Allowance paid through salary to employees in India.
Meal allowance in salary is tax exempt component and therefore many companies give food coupon to employees. Ideally it is to be used for ready to eat food and for meal taken in office (or nearby office within working time).
However, the coupons are grossly misused to create parallel currency.
· The coupons are redeemed without signature of the beneficiary. Thus, the usage becomes untraceable. And some vendors rotate/exchange the coupons as parallel currency. Is this legal? If not, why IT Department is silent on this?
· How can grocery stores and malls accept such coupons if the allowance is for ready to eat Meal? Isn’t this illegal to claim tax benefit for shopping groceries?
· How can the coupons be redeemed in bulk? The exemption is for Rs 50 spent every day on meal.
Income tax department must issue notice to such food coupon vendors (Sodexo, Ticket Restaurants) to explicitly make these points clear to their customers. Also the redeemed coupons should be checked randomly to confirm signature at the back of the coupon. Companies should also be mandated to record the use of coupons since they claim income tax exemption for their employees on the basis of these coupons.
Millions of employees and their employers grossly misuse the benefit of Meal Allowance to avoid tax. IT Department is requested to act and stop this tax fraud.
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