5 facts regarding Food coupons / meal pass and its tax implications

Food coupons

Many companies give food coupons/ meal pass to their employees and do not deduct tax on it. As a Compensation & Benefit manager,  you should know followings before exercising option of food coupons / meal pass.

Following is the abstract of the perquisite valuation rule governing issuance of meal vouchers

(iii)   The value of free food and non-alcoholic beverages provided by the employer to an employee shall be the amount of expenditure incurred by such employer. The amount so determined shall be reduced by the amount, if any, paid or recovered from the employee for such benefit or amenity:

Provided that nothing contained in this clause shall apply to free food and non-alcoholic beverages provided by such employer during working hours at office or business premises or through paid vouchers which are not transferable and usable only at eating joints, to the extent the value thereof either case does not exceed fifty rupees per meal or to tea or snacks provided during working hours or to free food and non-alcoholic beverages during working hours provided in a remote area or an off-shore installation.


FAQ 1: What is the maximum value of food coupons which can be issued to an employee in a month?

From the rule it is clear that Rs 50/- per meal is free from tax. Please note that the tax exemption is to be calculated on a per-meal basis and not on a per-month basis.

Example : If an employee consumes two meals a day using meal vouchers in a working day and works for 26 days in a month (Sunday being week off), then meal vouchers can be tax exempt only to the extent of Rs. 2,600 per month (Rs. 50 per meal x 2 x 26 days).


FAQ 2  : What does meal means in this rule?

“Meal” should mean for breakfast, lunch, and dinner.


FAQ 3: Do we need to also keep record of employee leaves?

Yes, the reason is simple. Meal passes/ food coupons are tax free when it is consumed during working hours. If an employee takes leave for 6 days in a month where Sunday is week off, it means employee has worked only 20 days hence considering two meals in a day, Rs 2000/- will be tax free and Rs 600/- food coupons will be taxable, if company gives Rs 2600/- food coupons to employee.


FAQ 4: How company ensures that employee is spending food coupons on food only?

Employers can not do so hence employer can take declaration from employee that employee will use it only for food or send a communication to employees to adhere the rules.


FAQ 5: What should be ideal amount of tax free food coupons for an employee in a month?

As mentioned earlier an employee is allowed Rs 50/- per meal during working hour. I believe that an employee can only have one meal in a day during working hour and if there are 22 days in a month (Saturday and Sunday off) and also two days leave in a month, employee should be given Rs 1000/- food coupons for a month (Rs 50 x one meal in a day x 20 working days in a month).

Refer my previous blog Must to know about designing CTC-Cost to Company of an employee  to know about various components of salary structure and how it impacts employee’s tax



  1. ashish Thakkar December 2, 2013 6:44 am  Reply

    Is it necessary to give food coupons on continuity bases like

    If person wants food coupons for december month but dnt want ot on january month

    is it allowed by IT??

    Any problems for company in this matter?


    • govindsinghnegi December 4, 2013 2:39 pm  Reply

      Dear Ashish,

      There is no condition of giving food coupons on continuous basis. There is no problem for company.

  2. Mansha December 3, 2013 10:55 am  Reply

    Nice information

  3. govindsinghnegi December 4, 2013 2:39 pm  Reply

    Dear Mansha

    Thanks for your appreciation. This means a lot.

  4. Sarita Pareek January 7, 2014 9:57 am  Reply

    Hello Sir,
    Please tell me what are the different investment on which employees can get income tax rebate & what is the last late of its submission?

    • govindsinghnegi January 9, 2014 3:23 pm  Reply

      Dear Sarita,

      This need a complete discussion. There are many such investments like LIC, mutual funds etc. Last date of submission is 31st March 14.

  5. Lincy Scaria March 6, 2014 6:02 am  Reply

    It was very informative and helpful

    • govindsinghnegi March 6, 2014 4:00 pm  Reply

      Thanks a lot for your appreciation.

  6. Prasad March 20, 2014 9:44 pm  Reply

    Mr. Govind Singh,
    I have run my business primarily in the US and just setting up offices in India. My CPA is too busy to send me any information in writing and will only respond to questions on phone. Your detailed explanations are a life saver for new employers like me. Thank you for this blog and your contribution. God bless you!

    • govindsinghnegi March 22, 2014 3:07 pm  Reply

      Dear Prasad,

      Thanks for your appreciation. This motivates me to keep sharing and helping

  7. Hariharan March 26, 2014 8:23 pm  Reply

    Appreciate the clarity. Very Professional

    • govindsinghnegi March 28, 2014 5:46 pm  Reply

      Thanks Hariharan for your appreciation. This motivates

      • gurumoorthy s April 22, 2014 5:54 am  Reply

        Is there any restriction in gratuity calculation when an employee attendance is less than a 10 days randomly a month on a year

  8. Rishi April 6, 2014 5:21 am  Reply

    Dear Mr. Govind, Thank you for this good article. Apart from food coupon, gift coupon is also allotted to the employees. (Amount Rs. 5000 P.A) Can you highlight this benefit in your article.

  9. Dr. Bijoy Jacob April 10, 2014 10:59 am  Reply

    Thanks for all the info. great stuff. we are an NGO Hospital (Charitable). out of 250 staff, 50 including nurses are residential and getting free meals (three times a day). being residential we very often have to work beyond mandatory 8 hours a day. Any tax implications for those in tax bracket?

  10. Victoria August 22, 2014 11:59 am  Reply

    Dear Sir, this is very informative and educative, for a newcomer like me. Thanks a tone

    • govindsinghnegi January 14, 2015 4:22 pm  Reply

      Thanks Victoria

  11. Gupta January 8, 2015 10:26 am  Reply

    Dear Govind,

    For HRA calculation, for IT , does we add CCA in basic salary for the purpose of salary calculation.

    • govindsinghnegi January 14, 2015 4:24 pm  Reply

      Dear Mr Gupta,

      CCA has no role to play while considering HRA for IT

  12. Parag February 8, 2015 3:05 am  Reply

    Good job

    • govindsinghnegi April 22, 2015 3:23 pm  Reply

      thanks Parag

  13. Harsimran March 25, 2015 6:20 am  Reply

    Very informative

  14. govindsinghnegi April 22, 2015 3:24 pm  Reply

    Dear Harsimran

    Thanks for your appreciation

  15. san June 23, 2017 6:12 am  Reply

    Where are the food coupon deductions applied in Form-16?

Leave a Reply