Upgrad LLM

ticket resturant vouchers


Hi,

Can any one please advice if there is a limit on Accor Meal Vouchers... for taxing purpose. Actually the problem is i take abt Rs.5000 Ticket Resturant Vouchers every month and today my accountant said that their is a limit and Tax benefit will be given only for Rs.37500 per annum... Please adivice if this is correct.. as this is not Lunch allownace..

Regards, Vidya A M

 
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Legal Consultant/Lawyer














FBT and tax related issues










Tax Free for Employers








Since May 2005 CBDT has adopted a new approach of computing tax with the introduction of the Fringe Benefits Tax. 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 :


  • expenditure on, or payment for, food or beverages provided by the employer to his employee in office or factory;

  • 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 Ticket Restaurant Meal Vouchers given to employees.














Tax Free for 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.


 


Ticket Restaurant Meal Voucher is not taxable in the hands of employees.




Further, go throug the sites:


http://www.accorindia.com/En/productandservices/faq/index.asp


http://www.citehr.com/31177-meal-vouchers-exempt-tax-not-2.html


 

 
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Thanks for the reply.. can u please let me if there is any limit on this Ticket Resturant coupons...


Regards,


Vidya A M

 
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Advocate

Dear Ms Vidya:


The reply of Mr Aejaz is limited only to the extent of Taxation on the employer Under the Provisions of FBT. However, For an employee the meal passes are restricted as advised by your accountant and if you receive amount over and above the limit specified, then such amount that exceeds the amount exempted will be taxable in the hands of the employee.

 
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