Most urgent-clarification on food & attire allowance

Dear Friends,

I was doing the re-structuring of CTC structure. I want the clarification on Food Allowance & Attire Allowance

1)     Food Allowance : As per IT Act if we provide sodexo passes to the employees to the extent of Rs.50/- per meal in a day           then that amount won't attract tax to the employee. But if I give the food allowance within the same limit then will it be taxable in the hand of employees. If yes, then can give the benefit I receive the reimbursement forms in this regard from employees.

2)   Attire Allowance :  If I provide Attire allowance of lets say Rs.3000/- per month and employee provide me the bills of buying the clothes etc then can I provide them exemption from tax.

Request you to give me your feedback on this on urgent basis.

 

Thanks in advance.

Regards

Deepak Arora

 

 

Replies (1)

Dear Deepak,

1. Only meal passes are allowed as tax free allowance in salary income not reimbursements. If employees are having meals in office and company is reimbursing for the same, same may be treated as expenditure for the company and no treatment in the hands of employee.

2. Attire allowamce is exempted provided bills are submitted by the employees.

 

Regards,

Sandeep

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