World Food Safety Day: Get income tax exemption on your meals, beverages, even tea in office! Here's how

The first-ever World Food Safety Day is being celebrated on Friday, under the theme ‘Food Safety, Everyone’s Business’. This new regime was adopted by the United Nations General Assembly last year in December. To facilitate member states' efforts to celebrate this day in coming years, the World Health Organization (WHO) has collaborated with the Food and Agriculture Organization of the United Nations (FAO). The agenda of this campaign is to provide access to sufficient amounts of safe and nutritious food which is seen as key for sustaining life and promoting good health. 

That said, on this special day, let’s understand the income tax benefits a salaried employer has in regards to food and beverages. Honestly, not many are aware, but the Income Tax Department does give tax exemption on the meals in your office. 

Under section 17 of Income Tax Act, a salaried employee’s salary, perquisite and profits in lieu of salary have been defined. As per the act, salary includes wages, annuity, pension, gratuity, fees, commission, advance salary, etc. While perquisites   are the extra benefits provided by an employer to their employee. 

And what comes under perquisites? The amount defined as rent-free accommodation, concession, dearness allowances, retirement benefits, employer’s contribution to provident funds and yes, food benefits, etc. 

According to the department, 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 amenities.

As per section 17(2)(viii) which highlights the value of any other fringe benefit or amenity as may be prescribed, along  with Rule 3(7)(iii), states that, free meals in excess of Rs 50 per meal less amount paid by the employee shall be taxable perquisite. 

However, following free meals are exempted from tax. 

• Food and non-alcoholic beverages provided during working hours in remote area or in an offshore installation.
• Tea, Coffee or Non-Alcoholic beverages and Snacks during working hours are tax free perquisites.
• Food in office premises or through non-transferable paid vouchers usable only at eating joints provided by an employer is not taxable, if cost to the employer is Rs. 50(or less) per meal.

This simply means that, free food and non-alcoholic beverages which are provided to employees during working hours of their office premises or even as matter of fact through paid vouchers defined as not transferable are not considered as taxable perquisites. To treat this as tax exempt for employees, a cap of Rs 50 per meal has been prescribed.