Introduction-
There is different kind of sodexo coupons available, but mainly Sodexo Meal Pass coupons are given by employer to its employees on monthly, quarterly basis, if the value of the coupon exceeds Rs. 50 per meal then the excess value is taxable in hands of an employee. These are beneficial for persons who come under the income tax bracket.
Now these days the Sodexo meal coupons are converted into metal cards i.e. digital form, which reduce the cost of printing of booklets etc. These digital forms have security features also.
Under rule 3(7)(iii) of I-T Rules- (Tax Free)
- Free food and non-alcoholic beverages provided to employees during working hours at the office premises or through 'paid vouchers', which are 'not transferable' and 'usable only at eating joints', to the extent the value thereof in either case does not exceed Rs. 50/- per meal or
- Tea or snacks provided during working hours or
- Free food and non-alcoholic beverages during working hours provided in a remote area or an off-shore installation.
Example 1 -
if 2 meals are provided by an employer (i.e. Breakfast and Lunch or Lunch and dinner) a day, so the tax-free perquisite is as under-
Answer = 2 times * Rs. 50 per meal = 100 / day * 22 days (if working days) = Rs. 2,200 per month
The Value of Rs. 2,200 of Sodexo coupons are tax free.
As the above rule, the valuation of this perquisite is done taking the gross cost to the employer as reduced by an amount collected from the employee in this regard, i.e. at the net cost to employer. This perquisite is tax free only to the extent of Rs. 50 (max) per meal during the working hours.
Example 2 -
If an employer provides food coupon valued of Rs. 250/- per meal to his employees and recover Rs. 70/- from them. Whether any tax liability arises or not?
Answer-
Value of Food Coupon provided to employees = Rs. 250 per meal
Less: Allowed as per rules = Rs. 50 per meal
Less: Recovered from employee = Rs. 70 per meal
Balance is taxable in the hands of employee = Rs. 130 per meal
Advantage of Sodexo Meal Coupon-
Tax benefit to employees – As above example 1, if an employee comes under the category of 30% tax slab. Then every month they could save Rs. 660 per month. This comes to Rs. 660 * 12 months = 7,920 in a year
Tax Levied on Sodexo Meal Coupons-
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Whether taxable or not
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Free food and beverages perquisites provided to an employee
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Taxable
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· If free meal is provided in excess of Rs. 50/- per meal after deducting an amount collected from an employee (As per above example 2)
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Not Taxable
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1. Free food and non-alcoholic beverages provided to employees during working hours at the office premises or through 'paid vouchers', which are 'not transferable' and 'usable only at eating joints', to the extent the value thereof in either case does not exceed Rs. 50/- per meal or
2. Tea or snacks provided during working hours or
3. Free food and non-alcoholic beverages during working hours provided in a remote area or an off-shore installation.
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