Tax treatment of employer-provided meals revised: What it means
What's the story
In a major development, the Central Board of Direct Taxes (CBDT) has revised the tax treatment of meal card benefits under new income tax rules. The revision, effective from April 1, 2026, raises the tax-exempt limit on employer-provided meals to ₹200 per meal from the previous ₹50. The earlier restriction that denied this benefit under the new income tax regime has also been removed.
Benefit expansion
Meal card benefit now available under new tax regime
The new tax regime, which offers lower tax rates but fewer exemptions, now allows taxpayers to avail of the meal card benefit. This is a major change as earlier, this benefit was only available under the old regime with higher tax rates and more exemptions. The move is expected to attract more taxpayers toward opting for the new regime.
Tax classification
Understanding meal card benefit as per tax rules
Unlike deductions under Section 80C, meal vouchers are classified under salary perquisite valuation rules. This means if the prescribed value is excluded before taxing salary, it doesn't become taxable income at all. However, to avail of this tax-free benefit of ₹200 per meal, employees have to meet certain conditions regarding its usage, timing and structure.
Claim requirements
Conditions to avail tax-free benefit
To claim the tax-free benefit, both meals should be provided during working hours. The benefit is generally calculated on actual working days (20-22 days a month), not weekends or holidays. Meal vouchers can only be used for food and non-alcoholic drinks, not groceries or other items. The meal voucher/card should be issued by the employer as part of salary package and any amount above ₹200 per meal becomes taxable as a perquisite.
Benefit scope
What about snacks, beverages, and meal cards?
The tax-free benefit also covers meals, snacks or beverages provided during working hours. This includes things like tea, coffee, breakfast, or light snacks. Meal cards or food vouchers such as Sodexo, Pluxee and Zaggle are employer-funded cards for food-related expenses. When structured according to tax rules, their value up to the prescribed limit isn't treated as part of taxable salary.