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What is the Sodexo Card? Can the meal pass card save some tax for you?

Did you know you could save up to ₹9k in taxes using Sodexo meal cards or food coupons?

What are food or meal coupons?

If you have been employed for some time, you would have seen many companies provide free food to their employees on the office premises. And others provide food coupons to compensate employees for their food expenses during working hours. 

Now, the expense of the meal or coupon is added to your CTC (Cost to Company). And this component can change your tax payable amount. 

Because according to Rule 3(7)(iii) of income tax, food coupons or meal vouchers are tax-exempt up to the limit of ₹50 per meal. Such meal vouchers issued by a company to its employees should be used only during working hours. It is restricted to two meals per day. 

So, if we assume two meals per day, this works to ₹100 per working day.

Let’s assume that if you consume two meals a day using meal vouchers in a working day and work for 22 days in a month, then meal vouchers can be tax-exempt to the extent of ₹2,200 per month (₹50 per meal*2*22 days). 

Most companies offer food coupons of ₹1,100 to ₹2,200. If you work for 26 days per month, you might get a food coupon for ₹2,600.

Therefore, your net taxable income can be reduced by up to ₹31,200. And this can save you around ₹9k in taxes (In 30% slab, excluding surcharge). 

Remember, this tax exemption is over and above the exemption allowed under section 80C. So you will find the food coupon allowance amount in your Form 16. 

Also, things have changed these days. Companies offer coupons to employees, and they use them anytime they want at eateries. They do not restrict it to working hours. 

Read more about what is Sodexo card, how to avail of additional discount on it, the benefits & drawbacks of the card and whether should you use it or not? Here - https://blog.vrid.in/2022/12/27/what-is-the-sodexo-card-can-the-meal-pass-card-save-some-tax-for-you/

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[finance1994]

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