Food Coupons, Meal Vouchers Tax Exemption in India

Food coupons save income tax on Rs 50 per meal in working hours. Grocery, use food card at restaurant, Sweet Shop, bakery, Pizza hut, KFC, Subway, Big Bazaar.

Written by Anil Gupta
  By Anil Gupta          Updated  26 Nov, 19

  16    


What are food coupons?

Food coupons are nothing but plain vouchers given by organisations to employees to have a meal at your convenience. The two big companies that issue such coupons are SodexHo and Ticket Restaurant. Your organization would tie up with these coupon providers and provide you the coupons as part of your salary package (CTC).

These days, many companies have started giving the prepaid food cards like HDFC Food Card Plus. They work in the same manner as the paper coupons but look like a debit card.

Normally, organizations make it an optional feature of your package so that anybody who does not want them can opt out.

 

Meal vouchers are income tax exempt?

Well, the benefit is too good to ignore. The income tax of India recognizes these food coupons or meal vouchers as a tax exempt entity. i.e. The amount of coupons you avail are not included in your taxable salary.

So, the amount you would normally paid as income tax would land up in your pocket to spend!

 

What is the Tax Benefit?

Income tax rules mentions meal allowance through meal vouchers can be provided up-to Rs.50/- per meal during working hours.

Assuming that any employee would consume at least two meals during work hours (breakfast and lunch or evening snacks and dinner), and hence at the rate of Rs.50/- per meal and Rs. 35/- for tea and snacks, the company could provide Rs.135/- per working day as the maximum allowance to the employee.

Hence, if you opt for Meal Vouchers @ Rs. 135/- (Rs. 50/- per meal x 2 Rs. 35/- for tea and snacks) per working day, instead of cash in your salary, the tax you save on Rs. 42120/- i.e. (Rs. 135/- x 26 days x 12 months) is:

Tax Benefit

Tax Slab30.90%20.60%10.30%Meal Vouchers
Meal Allowance*42120421204212042120
Tax Deduction1301586774338NIL
Net29105334433778242120
* @ Rs. 135 x 26 Days x 12 Months

Where to Use Food Coupons?

Meal Vouchers can be used as a mode of payment for purchase of food items and non – alcoholic beverages.

They can be used in any shop designated as a Food and Beverage outlet.

Supermarkets and Kirana Stores with Visa sticker will accept the Food Plus debit Card.

Typically, you can use these at Restaurants, Sweet Shops, Bakeries, Fast Food Corners and Food Outlets.

Most of the big grocery chains like Big Bazaar, Reliance Fresh including dining restaurants like Mc Donald’s and Pizza Hut, KFC accept these.

They have a validity of one year typically from 1 Jan to 31 Dec of any year and can be used anywhere in India.

The outlets generally have the stickers of the vouchers pasted on their visible areas to show that they accept these coupons.

In what form do I get the food coupons / Meal Vouchers?

Meal vouchers are issued in denominations of Rs. 50, 20, 10 and 5. Please note that outlets will not return the change in CASH if the total amount is not rounded off to the denomination of coupon you have.

If you get a Debit card (like HDFC food Plus card), then there is no need to worry about denominations. These cards work like debit card and any amount can be swiped.

Example:

Lets say that you have made a purchase of Rs. 267 and want to pay with food coupons. Then you can pay 4 * 50 1 * 10 1 * 5 = 265.

If you use one more Rs. 5 coupon to pay the balance Rs. 2, the outlet will not return you Rs. 3 in cash. They can only return the change using Food coupons.

Since they don’t have a coupon of Rs. 3, you need to either purchase for this amount of forgo this amount. Or what you can simply do is pay Rs. 265 with coupons and Rs. 2 in cash!

Do I pay the same price for Food & Beverages with Meal Vouchers as I do with cash?

All meal Voucher affiliated outlets are bound to charge you as per the MRP/Listed price. In case of overcharging above MRP/Listed Price you should not go ahead with the purchase. A complaint needs to be lodged with the designated Manager in your company who will then pass this on to coupons issuer company.

Conclusion

Keeping the food inflation in mind, it is certainly not a bad idea to avail of food coupons and get extra purchasing power in your hands. This money is obviously your own money and there is nothing wrong in saving tax the right way.

Most of the companies today have food coupons as part of their salary packages to help increase the take home pay of the employees. But in case your company does not have this facility, you need to convince your HR team.


Finance India
 






   16 Useful Questions & Answers from comments



  1. Raj Roy
    Raj Roy 31 Jul, 19 at 12:05 am

    Our company does not provide the food coupons or any meal coupons. But can i claim reimbursement of maximum allowed exemption amount/value while filing the returns?


    • Anil Gupta
      Anil Gupta 31 Jul, 19 at 3:44 pm

      You cannot claim it if your company does not provide them.


  2. Meghna shinde
    Meghna shinde 19 May, 19 at 11:47 pm

    Can you please clarify how much maximum exemption a person can claim for meal vouchers as per income tax act? please specify the value/ amount in figures per annum


    • Anil Gupta
      Anil Gupta 20 May, 19 at 5:30 am

      If you have read the article above, all information has been already given and answers your question.


      • Meghna shinde
        Meghna shinde 20 May, 19 at 5:50 am

        Hi Anil according to the article the max. amount on which an employee can get exemption is 42150, but in common practise only 2 meals a day are considered for meal voucher . So I want to know the figure that you have stated here is it correct if you take income tax act in consideration .


        • Anil Gupta
          Anil Gupta 20 May, 19 at 8:12 am

          The income tax law allows 3 meals. If your employer is only allowing 2 meals a day, then you can do the match yourself.


  3. Gitanshu Khurana
    Gitanshu Khurana 2 Oct, 18 at 10:46 am

    Our Company provides subsidized food where employees pay Rs 25 and company pays the rest Rs 45 for a meal. For this purpose company printed paper food coupons (Rs.25 * 20 coupons per booklet =Rs 500) are issued to employees and amount is deducted from salary. My question is does the employee share qualify for tax deduction in their return?


    • Anil Gupta
      Anil Gupta 2 Oct, 18 at 10:57 am

      You should check with your company’s Finance department if this food coupon is eligible for tax exemption. It will be tax exempted only if it is recognized by government of India.


      • Gitanshu Khurana
        Gitanshu Khurana 3 Oct, 18 at 11:09 pm

        Thanks for your help!


  4. ramana nandyala
    ramana nandyala 8 Jul, 18 at 10:16 pm

    Our company doe not provide the food coupons so, can i get the refund on this while filing the returns?


    • Anil Gupta
      Anil Gupta 9 Jul, 18 at 7:26 am

      No, you cannot. This tax rebate is only available if you get food coupons/vouchers from your employer.


  5. Shahla Ahsan
    Shahla Ahsan 25 Apr, 18 at 5:11 am

    Our Company has provided us with HDFC FOOD CARD PLUS, I want to know if there are any GSTs applicable on it?


    • Anil Gupta
      Anil Gupta 25 Apr, 18 at 7:58 am

      I am not 100% clear about your question.
      If the GST is charged on any product that you are buying with card, then yes, you have to pay GST. This card will only allow you to make the amount (it has been loaded with) income tax free i.e. you do not pay income tax on it.
      Rest, all other taxes have to paid at purchase time.


      • Shahla Ahsan
        Shahla Ahsan 25 Apr, 18 at 10:45 pm

        Thanks for the info. Just curious if GST has to be paid along with total loading amount by company while reloading amount into my HDFC food card.


        • Anil Gupta
          Anil Gupta 26 Apr, 18 at 5:29 am

          I don’t think that GST should be charged at the time of loading the money on card.
          GST has to be charged on good and services.
          If bank is charging any service fees to load the money on card, then they will charge GST only on the service fees and not the whole amount.


  6. Moontigey
    Moontigey 20 May, 11 at 7:07 am

     yess Ok Thank For You!



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