Following are exempt
(1) Tea/ Coffee / Snacks provided to Employees during office hours.
(Only non alchoholic beverages covered here)
(2) Food provided to Employees during office hours.
(a)In Remote area → No Limit
(b)In Other Cases → Rs.50/- per meal
If provided through paid meal vouchers which are non transferable, then also exempt.
However all other cases are taxab le like
1 .Alcoholic Beverages
2.Food greater than Rs.50/- per meal (If Rs.60 per meal then balance Rs 10 taxable)
3.Food provided After Office hours is taxable
4.Meal vouchers which are transferable
In all above cases, Cost of food less any amount Recovered will be taxable.
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Questions
Q1
Mr Ajay receives basic salary of Rs.50000 P.M
He also gets free food at office, cost of food per meal is Rs.80/- and he works for 300 days
Calculate Income from Salaries
View answer
Basic salary = 50000 × 12 = 600000
Free food Perquisite = (80 – 50) × 300
= 9000
Income from salary = 600000 + 9000=609000
Q2
Suppose the company charges Rs.20 per day from Ajay regarding meal in Q1
View answer
Free food Perquisite = 9000 – (20 × 300)
= 9000 – 6000
= 3000
Income from salary = 600000 + 3000=603000
Q3
Suppose free coffee is provided every day cost = Rs.10 per coffee for 300 days
View answer
Tea and Snacks provided during office hours are exempt even similar refreshment like coffee is Exempt as per CBDT Circular
Q4
Solve Q1 Assuming Employee is posted in remote area and get free food per day @80/plate for 300 days
View answer
If food provided in remote areas than fully exempt without limit .
Basic salary = 50000 × 12 = 600000
Free food Perquisite = Exempt
Income from salary = 600000 + 0=600000