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Food Coupon allowance can be given by the employer during working hours or through pre-paid food vouchers/coupons which they can use in designated canteens etc.

Food Coupons

• One of the favored tax breaks that are allowed under the tax Act is food coupons or meal vouchers.
• Food coupons or meal vouchers are limited to an exemption of Rs 50 per meal.
• Such a meal voucher issued by an organization to its employee should be used only during working hours and is restricted to 2 meals per day.
• This works to Rs 100 per working day, as it’s generally assumed that a person would have two meals during a working day.

Example Of Food Coupon Allowance

• Let’s think that if an employee consumes two meals a day using meal vouchers during a working day and works for 25 days during a month.
• Then meal vouchers are often tax-exempt only to the extent of Rs 2,500 per month (Rs. 50 per meal x 2 x 25 days). 
• Now meals are often either breakfast, lunch, or dinner. 
• It is also important to note that the meal vouchers issued to employees are non-transferable and can be used at restaurants and other eateries.

Also, read | Books and Periodicals 

FY 2020-21 Impact On Income Tax Act Of  Food Coupon Allowance

• Under the new tax regime effective FY 2020-21, an employee can no longer claim an exemption for Food Coupons given as a  paid vouchers.
• The exemption value of Food Coupons/Meal Vouchers is ₹50 per meal under the new tax regime.
• Provided that nothing contained during this clause shall apply to free food and non-alcoholic beverages. 
• Provided by such employer during working hours at the office or business property or through paid tokens which are not transferable and usable only at eating joints.
• To the extent the price thereof either case doesn’t exceed fifty rupees per meal or to tea or snacks provided during working hours.
• The  free food and non-alcoholic beverages during working hours provided during a far-off area or an off-shore installation.”