Meal coupons given by employer to employees

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Ankita CWA Final Student (Querist)

16 February 2013 Good Afternoon.
I have a querry regarding taxability of meal coups issued by employer to employees.
This coupens are valid at some specified outlets or suppliers like Dominos, Demart, More mmega store from where employees can by goods in excnage of coupens issued by employer i.e a big manufacturing company promoted by Goovermnet.
how it will be charged under income tax act?
Is it chargeable in the hands of employeee? if No then whether its charged in hands of employer?
what is its accounting and tax rate or exemption limit?
each coupen is valued at 3000rs per month to each employee.

Ankit

Ankit (Expert)

16 February 2013 Dear Ankita,

s. 17(2)(vii) defines "perquisite" to mean "the value of any other fringe benefit or amenity as may be prescribed".

Thus, it will be taxable as perquisite in the hands of the employee..

however, there is an exemtion of Rs. 50 per day for the employees

- Ankit

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Ankit

Ankit (Expert)

16 February 2013 but yes...if they are used for shopping from malls etc, the emeption may not be available

CA Parul Saxena

CA Parul Saxena (Expert)

16 February 2013 1.These coupons forms part of salary as perquisites and hence taxable in hands of employee.
2.In the employers'books of account these coupons would be debited as salary in profit and loss account.

Ankita CWA Final Student

Ankita CWA Final Student (Querist)

16 February 2013 ya. while discuusing on this topic i had given this conclusion but the coupen are issued by other company to the employer and the employer will issue it to its employees. company which issues such meal coupen has claimed that 50 rs per meal per employee can be take for breakfast, meal as well as supper. it means 150 rs can be claimed as an exemption. i was not satisfied with their repaly as in general defination MEAL doen't include supper or breakfast. I have gone throu different different cases held under incometax department by giving different fillters but surprisingly there is no such case found. and the company has also claimed that their all client follows same practice and till today there is no querrry from IT department to their client...