Food coupens

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

20 September 2014 If any Employer provided food coupens (Sodexo) to its employee and recover the same amount from his salary, then is there any tax ememption on such food coupens for Employee ???

Querist : Anonymous

Querist : Anonymous (Querist)

23 September 2014 Waiting for Expert Advice

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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25 July 2024 Yes, there are specific tax exemptions applicable to food coupons or meal vouchers provided by an employer to employees. Here’s how it generally works in India:

### Tax Exemption on Food Coupons (Sodexo Coupons):

1. **Tax Exemption Criteria**:
- **Amount Limit**: Up to INR 50 per meal (for 2 meals a day) is exempt from tax. Therefore, if the value of the food coupons provided per meal does not exceed INR 50, the entire amount is exempt.
- **Employer-Provided**: The exemption applies when the food coupons are provided by the employer to the employee as a benefit.

2. **Recovery from Salary**:
- If the employer recovers the amount of the food coupons from the employee’s salary, the tax exemption still applies, provided the original issuance of the coupons was as a benefit.
- The recovery of the amount from the salary typically happens in cases where the employee uses the coupons for meals and the corresponding amount is deducted from their salary.

3. **Usage Restrictions**:
- The food coupons or meal vouchers should generally be restricted for use in specified outlets like restaurants or food outlets that are approved under the scheme (e.g., Sodexo outlets).

4. **Tax Implications for Employer**:
- The amount spent by the employer on providing food coupons to employees is considered as a deductible expense for the employer while computing their taxable income.

### Practical Example:

- **Scenario**: If an employer provides Sodexo coupons worth INR 100 per meal to an employee, and the employee uses the coupons for meals, the entire amount of INR 100 per meal can be exempt from tax, provided the conditions are met (such as being within the INR 50 per meal limit).

- **Recovery from Salary**: If the employer recovers the cost of the coupons (e.g., INR 100 per meal) from the employee’s salary, the initial tax exemption still applies based on the value of the coupons provided.

### Compliance Note:

- Employers should ensure compliance with the specific guidelines and regulations issued by the Income Tax Department regarding the issuance and use of food coupons to avail of the tax exemption.

In conclusion, food coupons such as Sodexo coupons provided by employers to employees are eligible for tax exemption up to a specified limit per meal, even if the employer recovers the cost from the employee’s salary, provided the conditions for exemption are met. This exemption is a beneficial provision under the Income Tax Act, aimed at providing tax relief on meal benefits provided by employers to their employees.

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