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meal coupons

CA Vishal (CA working in industry) (620 Points)

30 October 2009

Hi,

I just want to know to what extent is meal coupons ( ticket restaurant / sodexho) given to employees exempt under IT act .

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7 Replies

GAURAV BEHL (CA-FINAL ) (228 Points)
Replied 30 October 2009

rs 50 per day per employee.

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CA Trinath Galla (student) (3130 Points)
Replied 30 October 2009

Rs.50

Sunil (Trader) (2611 Points)
Replied 30 October 2009

Can one issue 30 coupons of Rs.50 in advance for the month? Conversely can the coupons be accumulated and used in one go. Is it issue based or encashment based?

sivaram (Asst Mgr-Taxation) (6918 Points)
Replied 31 October 2009

There is one point in this food coupon only if the coupon is spent on food it is allowed but if the person uses it for buying groceries it is not allowed.Correct my views if i am wrong.the real problem is when the coupon is given to the employee how one knows whether he has used the coupon for food or for purchase of Groceries? I need some good opinion and reply on this debate

Sunil (Trader) (2611 Points)
Replied 31 October 2009

Usually I have seen these coupons being used in large retail stores for purchase of packaged foods and soft drinks. They are not grocery items. They are ready to eat food sold in retail. These company executives have a large bunch of such coupons and they buy these snack items, cheese, long shelf life foods, pepsi and coke etc. against these coupons. Now these coupons can buy for you snacks and cold drink through these big bazaar as well as ice creams etc. and if you call for Rs.50 meals to office, these too qualify to be food. However, many of these retail chains usually specify on what items in their store these coupons can be used. For items not specified you have to pay cash or card.

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Sandeep Pandey (CA FINAL) (1306 Points)
Replied 01 November 2009

Rs 50 per meal per day.........................

mallela.ravikiran (learner) (136 Points)
Replied 03 November 2009

The Central Board of Direct Taxes has clarified that employees are not to be taxed when they are issued non-transferable food coupons usable only at food outlets.

There is no limit laid down by law on the amount that can be paid through such coupons. Similarly, the employer is also not chargeable to Fringe Benefit Tax on the same.