Hi, I want to know the tax treatment for food reimbursement.How much amount is exempted from tax.
Amir
(Learner)
(4016 Points)
Replied 01 May 2010
Dear Yogita,
Food reimbursements given to employees (other than in the form of Daily allowance on tours or any official lunch/dinner ) is fully taxable.
SUDHIR & PRADEEP JI
(CA FINAL+LLB + DISA)
(2299 Points)
Replied 01 May 2010
food reimbursement perqusities is fully taxable
Any lunch/dinner/Refreshment Allowance paid by the emplooyer is fully taxable. If free meals are provided during the working hours then taxable value of perquisite will be
a) Actual Cost to the employer in excess of Rs 50 per meal
b) less : Amount recovered from employee if any
c) Taxable value of perquisite
Free meals provided will not be a taxable perquisite, if it is provided in any remote area or offshore installation area.
Dear Yogita,
i am not agree with sathish, rahul
it is my opinion, based on past experience , that a request for reimbursement of expenses incurred in the course of working is not taxable
for a example any business guest will come in your office and you are provide lunch,snacks
then u are reimb. for lunch exp. during visit of official guest in the office this not a taxable
i hope your query is soved out
Tanks - Rahul
SurajBarnwal
(CA)
(29 Points)
Replied 03 May 2010
Dear All,
I have a query on the same subject that a company is providing free lunch (or you can say- concessional) to its employees and the company is deducting Rs.200/- per month from the salary of its employees. Now my question is what will be the taxable amount to be included to each employee as perquisites, assuming that the meal cost per person is Rs.60 per head.
Thanks in advance.
Dear Rahul,
Eventhough expenditure relates to official purposes, employee derive some benefit on account of his association with his employer. That is why, in respect of reimbursement of some official expenses Income Tax Act specifies Maximum Exempt amount. For Example Travelling allowance given for meeting travelling expenditure from residence to office and back is exempt upto Rs 800 in case of normal employees and Rs 1600 in case of handicapped employees.
Still there are some expenses/benefits to employees which escapes from tax. Considering this only FBT was introduced and which was later abolished also.
I hope I have made an attempt to provide some clarity to the issue
DT Fundas - Tarun rustagi
( Author)
(1150 Points)
Replied 03 May 2010
agree with satish in respect of yogita query
and dear suraj sir employee will be liable to pay tax based on following treatment
no. of meals in a month*10 rs. per meal
less:-200 rs.per month
taxable amount(if it positive)
Dear Suraj Barnwal Sir,
Assuming that the company has provided free meals for 300 working days in a year, the value of perquisite taxable in the hands of employee will be
|
Particulars |
Amount |
|
Actual Cost to the Employer in excess of Rs 50 per meal (300 days * Rs 10 per meal) |
3,000 |
|
Less: Amount Recovered from Employee (12 months * Rs 200 per month) |
(2400) |
| Taxable Value of Perquisite in respect of lunch/refreshment | 600 |
Hence Rs 600 will be taxed as perks in the hands of each employee.
Dear sathish
Conveyance Allowance is not a traveling exp.and limit i know that of Rs.800/-
I have allready recd. of rs.800/- as a conveyance allowance and salary part of Rs.5625/- as a conveyance exp.
this is not a taxable of conveyance exp. under FBT
and i have paid of rs.1000/- per month as a conve. allowance so Rs.200/- taxable
you got it my point
Dear Rahul,
I Know that conveyance Allowance in not a Travelling expenditure. But the point I want to highlight is though it is paid to meet the travelling expenses from home to office and then back, it is considered that the employee derive some personal benefot from it. Hence it is not fully exempted from Tax.
Similarly Food reimbursement to the employee may also be considered as purely official in nature. But if it exceeds the reasonable cost it should be taxed. Hence a reasonable cost of Rs 50 per meal is specified in the Act and taxed in the hands of employee.
I just gave yo u a background of FBT for example. I dont want to go deep into it. I think you too got my point
CB Ayer
(Others)
(27 Points)
Replied 18 February 2018
I routinely on travel for marketing and client project related activities. I frequently spend from my pocket and get it reimbursed.
1. Is there any limit to travel expenses reimbursement?
2. Should TDS be incorporated into travel expenses BEFORE or AFTER reimbursement?
3. I also sometimes get travel advance for the same, should it include TDS or will it be deemed as income in my name?
At the end of the month, I tally all travel expenses with travel advance. What will be the income tax implication?
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