New Tax Rules Enhance Meal Voucher Benefits: What You Need to Know
Meal card tax benefit: Do you get it under the new tax regime?
The Economic Times
Image: The Economic Times
Effective April 1, 2026, the Income-Tax Rules will increase the tax-free limit for employer-provided meal vouchers from ₹50 to ₹200 per meal. This change raises questions about its applicability under the new tax regime, but legal interpretations suggest that the benefit remains available for both tax regimes.
- 01The tax-free limit for meal vouchers rises to ₹200 per meal from April 1, 2026.
- 02The previous restriction on meal vouchers under the new tax regime has been omitted.
- 03Legal interpretations indicate that meal vouchers are not taxable perquisites under both tax regimes.
- 04The omission of the disqualification clause signals a legislative shift back to earlier provisions.
- 05Employees can benefit from meal vouchers without the previous limitations.
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Starting April 1, 2026, the Income-Tax Rules will allow a tax-free limit of ₹200 per meal for employer-provided meal vouchers, an increase from the previous limit of ₹50. This change has sparked debate regarding its applicability under the new tax regime. However, a careful analysis reveals that the earlier restriction, which denied benefits under the new tax regime from June 21, 2023, has been deliberately omitted from the new rules. Consequently, meal vouchers provided during working hours will not be considered taxable perquisites under either tax regime, provided they meet the conditions outlined in the new rules. This legislative change marks a significant shift, reinstating the benefits that were previously available prior to the introduction of the restriction. Overall, employees can now enjoy the enhanced meal voucher benefits without the burden of taxation.
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This change means employees can now receive more substantial meal vouchers without incurring tax liabilities, improving their overall compensation.
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