Food facility

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

09 February 2012 Our company is planning to provide free food facilities to its employees. What are all aspects to be considered before taking such decision?

Thanks in Advance.

CA MANOJ GUPTA

CA MANOJ GUPTA (Expert)
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09 February 2012 As per rule 3(7)(iii) effective from assessment year 2010-11 the value of free food and non-alcoholic beverages provided by the employer to an employee shall be taxed as perquisite in the hands of the employee and such value shall be the amount of expenditure incurred by such employer.
No perquisite chargeable in the following cases —
(a) free food and non-alcoholic beverages provided by such employer during working hours at office or business premises or through paid vouchers which are not transferable and usable only at eating joints, to the extent the value thereof either case does not exceed fifty rupees per meal; or
(b) Tea or snacks provided during working hours or;
(c) free food and non-alcoholic beverages during working hours provided in a remote area or an off-shore installation.
“Remote area”, as per Explanation (v) to rule 3 would mean an area that is located at least 40 kilometers away from a town having a population not exceeding 20,000 based on latest published all-India census.
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