Getting the most out of the food facilities at work
By Arnav Pandya
There are several benefits that are available in terms of food and beverages that are provided to the employee by the employer and these pertain to the facilities as well as some tax benefits. This is the reason that the exact details of the benefits received have to be checked for their eligibility. This will show whether there is any amount that will actually be taxed in the hands of the employees as this could add a tax burden on them. The exact nature of the benefits thus occupies a very important place as far as the employee is concerned.
The first thing is to understand the way in which the expense for food and beverages incurred on the employee might be taxable in their hands. For the individual employee any benefit that is received in the form of food and beverages if it is found taxable would be included under the head of perquisites. What this means is that the benefit of the value would be calculated and then added to the income of the individual. This will ensure that the amount will end up being taxed at the applicable rates for the individual so this could go to as high as 30 per cent.
In terms of the actual benefits any tea, coffee or non alcoholic beverages and snacks that are provided to the employee during working hours are tax free perquisites. This is the basic thing that a lot of companies give because it is part of the work environment and this will be tax free for the individual employee. The key part involves two main aspects where the first one consists of the items that are covered and here this is limited to beverages and snacks. Specifically excluded are alcoholic beverages and hence this also sets a limit to what is covered. Further this has to be provided during working hours so even this period is specified and hence it is limited in its nature.
There is also the question of the extent of the coverage in terms of the establishment and this includes all entities in all areas. However when it comes to the question of remote areas or off shore installations then the situation will be different due to the fact that here food as well as non alcoholic beverages are covered. This is slightly different as the category here is larger in terms of the presence of food as one of the items instead of just snacks. This means that all types of food items including meals will be covered for remote areas.
Meals for employees
There is also a benefit that is present in terms of meals that are provided to the employee by the employee. Again there are specific limits that are present here and these will need to be considered to see whether the employee will fall under the conditions and have some taxable element arising in the process. Meals that are provided during office hours to the employee will be tax free in their hands. Two main conditions are covered here where the first one is that it should be a meal and hence this will include food. The second is that it has to be provided during office hours so once this is beyond the time period then the conditions would change.
The other aspect that has to be considered is the monetary aspect of the transaction and this must not exceed Rs 50 per meal. So it could be 2 meals during the day so the total amount would actually be Rs 100. There is a way in which this amount has to be worked out as the cost to the employer has to be considered. Now if any amount is recovered from the employee then this is deducted from the cost and the net amount if it exceeds Rs 50 per meal would then be considered as the perquisite value.
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