Food Coupons, Meal Vouchers Income Tax Savings
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.
Food coupons are nothing but plain vouchers given by organizations to employees to have a meal at your convenience.
The two big companies that issue such coupons are:
- Sodexo and
- Ticket Restaurant
These days, many companies have started giving prepaid food cards like HDFC Food Card Plus. They work in the same manner as the paper coupons but look like a debit card.
Your organization would tie-up with these coupon providers and provide you the coupons as part of your salary package (CTC).
Normally, organizations make it an optional feature of your package so that anybody who does not want them can opt-out.
Tax Benefit of Meal Vouchers?
Income tax rules mention 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 cashing in your salary, the tax you save on Rs. 42120/- i.e. (Rs. 135/- x 26 days x 12 months) is:
Tax Benefit Calculation
|Tax Slab||30.90%||20.60%||10.30%||Meal Vouchers|
|* @ Rs. 135 x 26 Days x 12 Months|
Where to Use Food Coupons?
Meal Vouchers can be used as a mode of payment for the 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:
- Sweet Shops,
- 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 off the vouchers pasted on their visible areas to show that they accept these coupons.
Paper Voucher vs Debit Card
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 coupons 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 a debit card and any amount can be swiped.
Let’s 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 or forgo this amount. Or what you can simply do is pay Rs. 265 with coupons and Rs. 2 in cash!
The income tax of India recognizes food coupons or meal vouchers as a tax-exempt entity.
The number of coupons you avail are not included in your taxable salary.
So, the amount you would normally pay as income tax would land up in your pocket to spend!
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 the coupons issuer company.
Keeping the food inflation in mind, it is certainly not a bad idea to avail of food coupons. They get extra purchasing power in your hands.
This money is obviously your own money and there is nothing wrong with 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.
Recent discussion on forum
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?
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.
Thanks for your help!
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