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Issue of Sodexo Coupons to Employees in a Factory where Canteen run facility is available

RAMAN R (ADDL. GENERAL MANAGER - Internal Audit BEL) (52 Points)

18 June 2020

Lunch Allowance of Rs.100 per day is given to all Employees as part of CTC and is paid monthly through Payroll. Our Employer is running canteens in Factory Units. Those who use the canteen facilities are charged at cost and the amount is collected from Salary on monthly basis.

Can we give Sodexo Coupons to Employees to avail Income Tax benefits (even though Company run canteen is available)?

Kindly clarify me at the earliest.

CA RAMAN R M.Com

9449008172

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3 Replies

yasaswi gomes (My grammar is 💯 good I) (7290 Points)
Replied 18 June 2020

I just know went through an article which mentions possibility of this only when a person is more than 2,50,000₹ salaried. These individuals can restructure their salaries to include the following:

Food coupons like Sodexo and Ticket Restaurant; they are exempt from tax up to Rs 60,000 per year.
Medical expenses which are reimbursed by the employer are exempt up to Rs 15,000 per year.
Individuals living in a rented accommodation should have House Rent Allowance (HRA) as part of their salary.
Transport allowance is exempt upto Rs 800 per month.
Leave Travel Allowance (LTA) can be claimed twice in a block of four years for domestic travel.

https://www.rediff.com/money/2009/feb/05tax-planning-tips-for-salaried-people.htm

RAMAN R (ADDL. GENERAL MANAGER - Internal Audit BEL) (52 Points)
Replied 18 June 2020

My query is not answered please.

Can we give Sodexo Coupons to Employees to avail Income Tax benefits (even though Company run canteen is available)?

Read more at: https://www.caclubindia.com/forum/issue-of-sodexo-coupons-to-employees-in-a-factory-where-canteen-run-facility-is-available-549819.asp?offset=0#reply

yasaswi gomes (My grammar is 💯 good I) (7290 Points)
Replied 18 June 2020

Yes. It is the management decision.

Besides, there is nothing wrong here if your employees are claiming meals expenses.

On the other hand, you will lose your other income as Sodexo is an outside caterer and not all employees are qualified to claim.

If I were to take this decision, I will continue with existing canteens partly and install a Sodexo canteen as well. A simple Customer profitability analysis will sort out who will profit.