Food Coupons

Food Coupons

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.”

 

Nikita Dhyani

Nikita Dhyani is a Content Writer at Ionic Digitech. A passionate content writer and has been using her content writing skills to develop various content related to financial and business-related topics. She has done BAJMC (Bachelors in media and mass communication and journalism) from Graphic Era University. Her specialties include - Content creation, Content development, Media managing, Communications skills.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.