Employers in India are providing sodexo coupons or ticket restaurant coupons to their employees which can be used by such employees at eating points. Lunch, dinner or refreshment allowance paid by employer to employee is chargeable to income tax.
Allowances provided at remote or offshore place
Food and non alcoholic beverage provided by an employer to an employee in working hours at a remote area or in an offshore installation is not taxable.
Allowances provided at other places
Tea or snacks paid by employer to employee in working hours is not taxable.
Food and non alcoholic beverages in office premises or through non-transferable paid vouchers usable only at eating joints provided by an employer to employee is tax free up to Rs. 50 per meal. For this reason, Sodexo or ticket restaurant coupon’s face value is not more than Rs. 50.
How to calculate taxable perquisite
Calculation of perquisite will be applicable only in cases where employer has provided lunch, dinner or refreshment at a place other than a remote place or an offshore installation place.
To calculate taxable perquisite we need to calculate the amount employer paid and the amount recovered from employer in addition to the income tax provisions applicable to this case. Here are the steps to calculate taxable perquisite;
|1||Amount incurred by the employer for employee||XXXX|
|2||Less: the amount recovered from employee||XXXX|
|3||Less: Rs. 50 per meal||XXXX|
|4||Taxable Perquisite (Step 1- step 2 – step 3)||XXXX|
As per the provisions such perquisite will be taxable only if it is paid in working hours, how about paying it in holidays or overtime or extended office hours. It has been clarified that working hours will include extended office hours, holidays or overtime.
The exemption limit is Rs. 50 per meal. But it has not been clarified how many meals per day or per year is actually allowed. A person can have one meal in a day or can have more than one. As specifically it has not been provided an employer can assume 4-5 meals per day.