Sodexo Meal Coupon- Meaning & Tax Benefits
Employers usually provide food facilities as a part of perquisites to their employees. Such food facility may be in-house through canteens run by company or contractors. In some cases, the employers provide food coupons like Sodexo Meal Coupons to their employees. Employees can use this prepaid meal card to buy free food and non-alcoholic beverages. Employees can use this card at the outlets of Sodexo partner merchants. The list of partner merchants includes Swiggy, Zomato, Big Bazaar, Spencer’s, KFC etc. Sodexo Meal Coupons/ Card is widely acceptable in more than 1700 cities and towns across India. Sodexo Meal Coupon/ cards have tax implications attached to it. Let’s discuss…
What is a Sodexo Meal Coupon or Card?
Sodexo Meal Coupon/ Card represents a prepaid instrument which allows employees to buy food, groceries, and non-alcoholic beverages. Sodexo Meal Coupons/ Card is offered as a part of salary package of the employee in form of a perquisite.
This card looks similar to your debit/ credit card. Every time you use this card, you need to use the Sodexo application on your mobile to generate a PIN or OTP for the transaction verification.
What are the income tax benefits of Sodexo Meal Card/ coupons?
As per the Income Tax Rules, 1962, Sodexo Meal Card/ coupons are not fully exempted. Following are the limits of tax exemptions as prescribed under the Income Tax:
- Food and non-alcoholic beverages provided during working hours in a remote area or an off-shore installation is 100% tax exempted.
- Tea, coffee, non-alcoholic beverages and snacks during working hours are tax free perquisites.
- Food in office premises or through non-transferable prepaid vouchers usable only at eating joints provided by the employer are not taxable, if the cost per meal does not exceed Rs. 50 per meal.
From the above reading, please make it clear that Sodexo Meal Card/ Coupons are liable for tax. Sodexo Meal Cards/ Coupons does not carry a 100% tax exemption. According to the Income Tax Act, free meal cards/ coupons are taxable if the amount spent per meal is more than Rs. 50. Employees are required to pay tax for the amount spent in excess of Rs. 50 per meal as a part of perquisites.
What will be tax implication where the employer provides Sodexo Meal Card/ Coupon at discounted rate?
Suppose, you receive a food coupon worth Rs. 500 per meal of which Rs. 150 is paid by you to your employer. The value of meal in excess of Rs. 50 is taxable. In this example, the value of coupon in excess of Rs. 50 is Rs. 450 (500-50). Out of this, you have paid Rs. 150 to your employer.
Therefore, the net taxable value of perquisite shall be Rs. 300 i.e. Rs. 450- 150.
Conclusion: Making Sodexo Meal Card/ Coupon a part of salary package could save a small amount of income tax for you. But it should also be noted that the benefit of tax exemption for these coupons is not available if you have availed new tax regime. Those who are opting for old tax regime can certainly avail the tax benefit of Sodexo coupons.
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