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.
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.