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all
My area of expertise
incometax, accounts etc
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all
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audit firm
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CA, M.com
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Rekha Jha
says
: tax on meal vouchers wef April 1 2009
Hi All, I see a few comments from fellow colleagues on Meal voucher law improper and hence taking the liberty of writing my understanding in detail for the benefit of all. Post abolition of FBT in 2009, govt of India in it's budget had mentioned that new rules for tax exemption on meal vouchers would be specified. the same was spelt out in a notification dt 18th dec 2009 (see IT deptt website). As per the notification meal allowance can be valued at NIL perquisite if 1) free or subsidised meal is provided to employees to the extent of the value contributed by the employer but subject to Rs 50 per meal. Snack and tea value was not spelt out but is exempted. 2) Meal vouchers to the extent of rs 50 per meal + snacks and tea (again value of snacks and tea was not specified). However, the meal vouchers should satisfy the following conditions a) Should be non transferable. b) Should be usable during working hours by employees c) Used at the rate of Rs. 50/- per meal d) Usable in eating joints only. Hence, there is a limit as well as conditions attached to meal vouchers. According to me, given the nature of meal vouchers, adhering to the conditions by the employees is difficult and hence poses risks to companies. Providing meals in the company canteen / cafeteria seems to be the safest. warm regards, rekha
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