Many companies give meal vouchers to their employees in a bid to help them save taxes. Here are few things about these meal coupons and tax exemption that comes with them.
- If an employee is paying for meal, tea or snacks during office hours, the amount spent is exempt from taxes.
- If the employer provides meal coupons compliant with RBI and IT guidelines, then the amount of INR 50 per meal vouchers given to the employee is deemed to be free from tax. This tax benefit is always offered as vouchers which e are non-transferrable and may be used at an eatery, a restaurant or a café.
Tax Exemption Limits
Food coupons or meal vouchers are one of the popular tax benefits that are allowed under Income Tax Act. Each of these tax-saving vouchers is not more than INR 50 in value. The amount taken into consideration is INR 50 for lunch and approximately INR 35 for tea and snacks per employee, per day.
What Income Tax Department Has To Say?
Here are a few lines that are directly taken from the IT Act which covers provisions related to food coupons or meal vouchers.
“Provided that nothing contained in this clause shall apply to free food and non-alcoholic beverages provided by such employer during working hours at the office or business premises or through the paid vouchers which are not transferable and usable only at eating joints, to the extent value thereof either case doesn’t exceed fifty rupees per meal or to tea or snacks provided during work hours or to free food and non-alcoholic beverages during working hours provided in a remote area or an off-shore installation.”
Meal Vouchers of Today
Nowadays meal coupons have come of age. Take for example Optima Meal Vouchers which are touted as country’s first electronic tax-saving food vouchers.
One of the biggest advantages of these digital alternatives to their paper-based ancestors is that they eliminate the challenges of dealing with booklets or storing and sending them to employees every month (in-fact paper based solutions are history with RBI’s latest draft guidelines for wallets. You can run and manage the entire solution from your computer’s interface quickly.
Meal coupons’ tax exemption is one of the benefits, besides they are easy to manage and need lesser administrative resources.