Current Exemption: Rs 50 Limit
For the Financial Year 2025-26, the tax exemption on meal vouchers remains capped at Rs 50 per meal. This means that even if your employer provides a higher
amount, such as Rs 200 per meal, only Rs 50 of that benefit is considered exempt income. The excess amount, in this case Rs 150 per meal, is classified as a taxable perquisite and will be added to your overall salary for tax calculation purposes. This established limit is in line with the prevailing regulations and is crucial to remember when you file your Income Tax Return (ITR) for this assessment year. It's important to correctly identify and report only the eligible portion of your meal benefit to avoid any discrepancies.
Future Clarity: Rs 200 Limit
The discussion around the Rs 200 per meal limit stems from revised provisions under new Income-Tax Rules, but crucially, these changes are prospective. Suresh Surana, a Mumbai-based chartered accountant, explains that the enhanced exemption limit of Rs 200 per meal is set to apply from the Tax Year 2026–27 onwards. This means that any meal benefit provided above the then-applicable threshold will continue to be treated as taxable. For those eligible, this could translate to a significant annual benefit, potentially reaching Rs 4,400 for one meal a day or Rs 8,800 for two meals a day, assuming 22 working days in a month. This upcoming change offers a more generous allowance for meal expenses in the future.
Tax Regimes Matter
A significant point of confusion arises from the choice of tax regime. For the current Financial Year 2025–26, the enhanced meal voucher exemption is not available under the new tax regime. According to Surana, for FY 2025–26, taxpayers are governed by existing provisions, meaning meal benefit exemptions are only available to those opting for the old tax regime. Individuals under the new tax regime are not eligible to claim this exemption for this period. The extension of this benefit to the new tax regime is slated to become effective only from FY 2026–27 onwards, at which point the Rs 200 limit will become applicable across both regimes, provided other conditions are met.
Form 16 and Documentation
It's a common misconception that if your meal card or Sodexo benefit isn't explicitly listed in Form 16, it's not recognized. However, Part B of Form 16 typically aggregates perquisites and might not show meal vouchers as a distinct item. The specific details are usually found in Form 12BA, alongside your salary structure, payslips, or a detailed compensation break-up provided by your employer. This document reflects the bifurcation of such benefits under the ‘Value of Perquisite as per Section 17(2)’ in the ‘Schedule Salary’ of your Income Tax returns. Therefore, it is imperative for employees to retain all supporting documentation, including transaction statements, employer policies, and salary records, to substantiate their claim for exemption where applicable.
