Free lunch by a hotel business - perk?

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CA Revanth Bharathwaj M (Querist)

29 January 2017 Hello, My question is that imagine there is a corporate having business in catering sector. All the employees have their lunch in branches and no formal record maintained for the same. Will it amount to perks?

Rupesh Maheshwari

Rupesh Maheshwari (Expert)

29 January 2017 Section 17(2)(viii) read with Rule 3(7)(iii) - Free food and beverages provided to the employee

1) Fully Taxable: Free meals in excess of Rs. 50 per meal less amount paid by the employee shall be a taxable perquisite
2) Exempt from tax: Following free meals shall be exempt from tax
a) Food and non-alcoholic beverages provided during working hours in remote area or in an offshore installation;
b) Tea, Coffee or Non-Alcoholic beverages and Snacks during working hours are tax free perquisites;
c) Food in office premises or through non-transferable paid vouchers usable only at eating joints provided by an employer is not taxable, if cost to the employer is Rs. 50(or less) per meal.

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CA Revanth Bharathwaj M

CA Revanth Bharathwaj M (Querist)

29 January 2017 But sir i clearly mentioned that there is no formal records maintained. now answer me whether it is mandatory to include it in perks? anyway thanks for your detailed answer...

Rupesh Maheshwari

Rupesh Maheshwari (Expert)

29 January 2017 Since the food is provided during working hours, it is NOT taxable

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CA Revanth Bharathwaj M

CA Revanth Bharathwaj M (Querist)

29 January 2017 thanks sir

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