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Querist : Anonymous

Querist : Anonymous (Querist)

15 October 2012 Whether there is any deduction available to the employee for lunch allowance given ?

I have seen one return where the deduction of Rs. 1000 was taken for lunch allowance.

But as per my knowledge , no deduction is available for the same ?

CA Manish

CA Manish (Expert)

15 October 2012 Free meals provided to you through paid vouchers, not transferable and usable only at eating joints to the extent of Rs 50 per meal .

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Querist : Anonymous

Querist : Anonymous (Querist)

15 October 2012 Now FBT has been removed ...

so The tax on this is neither payable by company nor by employee ? Is it so ?

SInce for Employees as you have mentioned that Rs. 50 per meal is exepmt , and the company would claim it under the Employee Salary head ?

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)

22 July 2025 Great question! Here’s a clear explanation about lunch allowance and tax treatment post-FBT removal in India:

1. Lunch Allowance Deduction for Employees
No specific deduction is available to employees under the Income Tax Act just for lunch allowance received as part of salary.

Lunch allowance is treated as part of salary income and fully taxable unless exempted specifically under some provision.

2. Meal Coupons/Vouchers (like Sodexo, Ticket Restaurant)
The Income Tax rules provide exemption of up to Rs. 50 per meal if the employer provides meal vouchers/coupons that are:

Non-transferable

Usable only at eating joints

Amount exceeding Rs. 50 per meal is taxable as salary in the hands of employee.

3. Impact of Removal of Fringe Benefit Tax (FBT)
FBT was abolished from April 1, 2009.

Now, taxability of meal vouchers or lunch allowance is directly on the employee’s hands as salary (not on employer).

So, employer no longer pays FBT on such benefits.

If employer provides meal vouchers within the exempt limit (Rs. 50/meal), that portion is exempt in employee’s hands as well.

4. In Case of Cash Lunch Allowance
If the employee receives cash lunch allowance as part of salary, it is fully taxable.

No separate deduction or exemption is allowed for cash allowance for lunch.

Summary
Scenario Taxability on Employee Taxability on Employer
Meal vouchers up to Rs. 50 per meal Exempt No FBT (post abolition)
Meal vouchers above Rs. 50 per meal Taxable on excess amount No FBT
Cash lunch allowance paid Fully taxable No FBT

So, about the return where you saw a deduction of Rs. 1000 —
that was likely a mistake or incorrect claim because no such specific deduction exists for lunch allowance under Income Tax.

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