Wednesday, December 13, 2017

Meal Allowance and Taxation for Indian Employees

What is meal allowance policy?


Meal allowance is a popular employee benefit offered by a number of organisations. The most preferred form of providing this benefit is the meal voucher or meal card. Since meal vouchers and cards are not in the form of cash, the meal benefit is not taxable in the hands of the employee.

Meal vouchers are a value-add in the salary package as they not only give employees a tax benefit but also let them enjoy a meal of their choice. These vouchers can be used at a number of affiliate restaurants, food outlets and shops. Employees can use them to buy food and non-alcoholic beverages that they like.

Meal policy for employees - Specific rules and tax exemptions.

Meal Vouchers are used in a number of countries. In India, Meal Voucher system was formally implemented in 2001. It is regulated by the Income Tax Act under which meal vouchers up to a total amount of Rs.50 per meal for a maximum of 2 meals per day is tax exempt. Companies can give more amount as meal benefit to their employees but any amount exceeding Rs.50 per meal will be taxable.

One meal per day: Rs.50 X 22 days = 1100/- per month tax free
Two meals per day: Rs.100 X 22 days = 2200/- per month tax free

                                            Meal allowance since 1997

Year
Taxable on Employees
1997 to 2001
Tax free up to Rs.35 per day
2001 to 2005
Tax free up to Rs.50 per meal
2005 to 2009
Tax free up to Rs.100 per day
2009 to present
Tax free up to Rs.50 per meal (max. 2 meals per day)
Find the best deals on Flipkart.



As per the latest RBI mandate, meal vouchers will be replaced by meal cards, starting January 2018. No new meal vouchers will be printed and all pre-paid meal voucher issuing companies have to switch to meal cards to continue providing this service.

digital meal card

While all companies have starting make the shift from meal vouchers to meal cards, it is noteworthy that Edenred, the issuers of Ticket Restaurant Meal Vouchers, made their shift to digital way back in 2014 when they first introduced their Meal Cards in India. Edenred will also be completely stopping the printing of its meal vouchers as per the RBI mandate and will go 100% digital with its meal benefits.

If you haven’t explored the many benefits of employee meal allowance and meal cards, check out Edenred India website today to know more!

Still, confused about Employee Allowances? This post will help you to understand employee benefit allowances.

0 comments:

Post a Comment

Find Best Deals on Amazon, Shop to Support!