Sodexo meal coupans

They are tax-free. No tax is requried to be paid on such vouchers.  however if the same are being encashed then tax would be payable on the amt recd.

This is taxable as non monetary perquisites.

 Threshold limit is Rs. 5000 for exemption..

Regards

Mr Pritam.  I also receive sodexho coupons from my,  but I have not paid any tax till date & I file my return without showing the coupons amount.  however my refunds have got credited.

Appreciated Giridhar Sir,

Even Mr. Ankur doesn't show value of such coupos and file his return of income then also he will get his refunds credited.

But the question under discussion is whether such values of coupons are taxable or not. Showing or not in return of Income is another issue.

Circular No.15/2001, Dated December 12, 2001

Valuation of Perquisites as per Rule 3 of the Income Tax Rules, 1962.

IX. Free meals - The provision of free meals varies widely from uniform canteen food, coupons etc. to lavish hotel meals. The scheme of free meals as a staff welfare measure had been recog­nised and was admissible upto Rs. 35 for each meal. The new rule does not treat as perquisite free meals if the cost per meal does not exceed Rs. 50. Where any amount is recovered from the employ­er, such amount shall be reduced from the value of perquisite. Such free or subsidised meal should, however, be provided at office premises or through non-transferable vouchers meant for only meals during working hours. These vouchers should be provid­ed by employers encashable only at an eatery, a restaurant or a cafe. Tea or similar non-alcoholic beverages and snacks - in the form of light refreshments during working hours are not charged as perquisite. Also, arrangements for meals in ‘remote areas’ as prescribed in para 5.1 and similar off-shore sites as specified, shall be exempt. However, expenditure on provision of free meals by the employer in excess of Rs. 50 should be treated as perqui­site, as reduced by recoveries made from the employee.

X. Gift, voucher or token in lieu of gift - It is customary in India, as it is in other parts of the world, to provide presents directly or indirectly in the form of vouchers or tokens to employees on social and religious occasions like Diwali, Christ­mas, New Year, the anniversary of the organization etc. Such gifts upto Rs. 5,000 in the aggregate per annum would be exempt, beyond which it would be taxed as a perquisite. However, gifts made in cash or convertible into cash, like gift cheques etc. do not fall in the purview of this sub-rule.

XV. Residual clause - A benefit or amenity not included in the rules shall be valued at the cost to the employer where the employer pays for the benefit or amenity. Otherwise, it would be valued at the amount the employee could reasonably be expected to pay to acquire such benefit or amenity from the market. However, the benefit of conveyance to and from residence to place of work, periodicals and journals required for discharge of work and expenses on telephones including a mobile phone shall not be included in calculating perquisite value.

So According to me Such coupons may fall in any of the above 3 catagories...

Opinions may vary, But sharing in true spirit of Profession and with an intention to enahnce knowledge around.....

Regards

Mr pritam, I think you are talking about the free lunch taken by employees in the canteen of the company or in the office premises of the company itself.  however the sodexho coupons are provided by sodexho co & the employee may or may not use the same for taking meals/snacks/tea etcc.. in the co's canteen.  He can use the same outside for other purposes such as purchasing vegetables, in any hotel where the coupons are accepted.  So I think that these coupons are totally tax-free and will not be included in the salary of the employees.

Agreed Sir,

But I have mentioned other 2 categories also....

So I feel that It should fall under any of the 3 categories...

either gift voucher or residual category....

May be we need some other expert's opinion

Regards

The definition of ‘Fringe Benefit’ under the new chapter XII H (As per subsection (2) of section 115 WB of Income Tax Act, 1961), excludes-

1. Expenditure on, or payment for, food or beverages provided by the employer to his employee in office or factory; 

2. Any expenditure on or payment through paid vouchers, which are not transferable and usable only at eating joints or outlets.

In this section, exemption has been granted completely for paid vouchers provided to the employees. Hence there is No FBT on employer on Sodexho Pass meal vouchers given to employees. 

With the shifting of tax liability on employer from employees in respect to certain fringe benefits, these fringe benefits, which were hitherto taxable in the hands of employees as perquisite, will no longer be taxable in their hands. Thus those items now chargeable to tax under FBT (Chapter XII-H) have been deleted from Rule 3, which dealt with valuation of perquisites in the hands of the employee. Paid Vouchers being one of the items.

Further, Rules for valuation of perquisites have been amended and clause (vi) has been inserted under Section 17(2) vide notification no. 68/2005 dated 28th February, 2005, as follows: 
(2) “perquisite” includes- 

(vi) the value of any other fringe benefit or amenity (excluding the fringe benefits chargeable to tax under Chapter XII-H) as may be prescribed: 

Since, paid vouchers have been covered under chapter XII H and are also not a prescribed perquisite for valuation they will not be taxable in the hands of employees.
 

Hope this will clarify the doubt.
 

From Above it is clear that such voucher coupans are Fringe Benifits...

After the inroduction of Fringe Benifits Tax burden of tax on such Fringe Benifits was shifted to Employer and thus it was exluded from the perquisites in the hands of employee.....

Sec. 115WM: Nothing contained in this chapter (Ch. XII-H) shall apply in repect of A.Y. 2010-11 and subsequent A.Ys.

After FBT was abolished tax burden on such Fringe Benifits was agian shifted from Employer to Employee....

[Sec. 17(2)(viii)]

The statement mentioned above..

"Further, Rules for valuation of perquisites have been amended and clause (vi) has been inserted under Section 17(2) vide notification no. 68/2005 dated 28th February, 2005, as follows: 
(2) “perquisite” includes- 

(vi) the value of any other fringe benefit or amenity (excluding the fringe benefits chargeable to tax under Chapter XII-H) as may be prescribed"

has been already SUBSTITUTED by sub clause (vi), (vii), (viii) by the finance act, 2009, hence above statement is no more valid.

Sec. 17(2)(viii) of the act clearly states that perquisites includes value of Fringe Benifits or Amenities...

As far as its valuation is concerned it is agreed that there is prescribed rule for valuation is given in Rule 3 but there is a Residual category . According to which value of such perquisites will be the value of coupans less any amount recovered by the employer from its employee...

Therefore coupans are taxable under the head salary as perquisites u/s17(2)(viii) under the residual category of Rule 3.

Regards

Hi Pritam,

This is an extract of the Sec 17(2)

(vi)  the value of any other fringe benefit or amenity⁸⁹ (excluding the fringe benefits chargeable to tax under Chapter XII-H) ⁸⁹as may be prescribed⁹⁰ :]

     (vi)  the value of any specified security or sweat equity shares allotted or transferred, directly or indirectly, by the employer, or former employer, free of cost or at concessional rate to the assessee.

            Explanation.—For the purposes of this sub-clause,—

      (a)  “specified security” means the securities as defined in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956) and, where employees’ stock option has been granted under any plan or scheme therefor, includes the securities offered under such plan or scheme;

      (b)  “sweat equity shares” means equity shares issued by a company to its employees or directors at a discount or for consideration other than cash for providing know-how or making available rights in the nature of intellectual property rights or value additions, by whatever name called;

      (c)  the value of any specified security or sweat equity shares shall be the fair market value of the specified security or sweat equity shares, as the case may be, on the date on which the option is exercised by the assessee as reduced by the amount actually paid by, or recovered from the assessee in respect of such security or shares;

      (d)  “fair market value” means the value determined in accordance with the method as may be prescribed;

      (e)  “option” means a right but not an obligation granted to an employee to apply for the specified security or sweat equity shares at a predetermined price;

    (vii)  the amount of any contribution to an approved superannuation fund by the employer in respect of the assessee, to the extent it exceeds one lakh rupees; and

The 3 sub sections were amended, thats correctly pointed out by you. But they were further amended by Finance (No. 2) Act w.e.f. 01.04.2010 and the section 17(2)(vi) stands amended as above

Regards

So whether sec. 17(2)(viii) holds good or not.

If yes then, in the amended provisions only it is clearly mentioned (as stated by you above) that "(viii)  the value of any other fringe benefit or amenity as may be prescribed"

Therefore such coupan value falls under the above section thus it is a perquisite chargeable to tax under the head salary.

Sodexo Meal Vouchers help you save up to 30% tax and gets you more disposable income. 

There is an upper limit that qualifies for tax rebate in India it is Rs 2000/-.

For example if I want to avail Sodexo coupon worth Rs 1000 then I get full rebate otherwise I am going to use only Rs 800/- as Rs 200/- in taxes. So you save Rs 200 in taxes using Sodexo coupons.

Most of the IT companies give you Sodexo coupons of worth Rs 2000 and you save over Rs 600/- per month in taxes.

Sir,

What is the Meximum limit of Sodexo meal card per month. As per the representative from Sodexo have informed me that its Rs. 100 (meal) + Rs. 35 (coffee & snacks) per day. So it becomes Rs. 135 per day. Total Rs. 3510/month.
But my doubt is what is the companies benefit in introducing such concept in salary structure. Give your advise 

Regards,

Utpal Parekh