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Chargeable meal at lunch hour

664 views 1 replies

CA Raju Kumar Shaw

Service

79 Points Joined November 2008

Dear My Professional Colleague,

One of my Clients is in their project stage of their Plant, they have arrange the meal at lunch , dinner, Breakfast (morning and Evening) in the plant premises through a contract given to M/s Sodaxo. They are charging Rs. 40 for each Meal and Rs. 12 per Break fast from the company. For Booking such expenses , Company debiting canteen expenses and crediting Sodaxo.

Company in return deducting the same amount from the salary of employee who ever is taking the service of meal or breakfast. For booking such transaction company crediting canteen expenses and debiting Employee.

What will be the implication of this transaction in the book of accounts from the Income tax view? Kindly give your valuable input on the matter.

Replies (1)

Jignesh Satapara

Taxation & Finance

31 Points Joined August 2011

entire expenses in relation to such lunch & dinner is deductable in the hands of the company.

however, cost to the company,*in excess of rs.50 after deducting the amount recover from their employee is consider as a taxable perquisite in the hands of employee.

*for ex.

if total cost rs.110 and company recover rs.30 from their employee.

then cost to company in excess of rs.50, i.e Rs.60 - less Rs.30 recovered from employee. so net rs.30 taxable as perquisite in the hands of employee.

company can take entire exp as a staff welfare exp.