Perquisite – Free Food Facility
Introduction
Free food, snacks, and beverages provided by employers during working hours can be tax-free under specific conditions. The exemption is subject to limits on the value and nature of the benefit.
Tax Treatment of Free Food Facility
- Tax-Free Benefits
- Snacks, Tea, Non-Alcoholic Beverages: Not taxable when provided during office hours.
- Free Meals: Exempt if the cost does not Rs. 50/- per meal, provided:
- Food is served during working hours at office premises or via non-transferable food vouchers usable at restaurants/cafes.
- Taxable Benefits
- Food exceeding 50 per meal. [Circular No. 15/2001, dated December 12, 2001]
- Meals provided beyond working hours or outside office premises.
- Alcoholic beverages, lunch allowances, or refreshment allowances.
- Free Food in Remote Areas or Offshore Installations
- Exempt from tax.
- Remote areas: Locations ≥40 km from a town with a population ≤20,000 (as per the latest census).
- Meal/Food Coupons (e.g., Sodexo)
- Tax-free when used for meals during office hours.
- If used at non-eating joints (e.g., grocery stores), technically taxable, but enforcement is limited.