Eat Your Way To Lower Taxes

wealthymattersEat , we all must. And done well, it  can be a small pleasure we indulge in 5-6 times a day, everyday  of our lives. And if we can reduce our tax-outgo , even as we indulge ourselves, we have more reason to be happy.

For the self-employed, there is the famous option of accounting for meals as business expenses and saving tax-outgo. And for the employed, there is the option of meal vouchers to save tax.

Income tax rule  Rule 3(7)(iii) says meal allowance through meal vouchers can be provided upto Rs.50/- per meal during working hours.

Assuming that any employee would consume at least two meals during work hours (breakfast and lunch or evening snacks and dinner), and hence at the rate of Rs.50/- per meal , the company could provide Rs.100/- per working day as the maximum allowance to the employee.

Hence, if you opt for Meal Vouchers @ Rs. 100/- (Rs. 50/- per meal  per working day), instead of cash in your salary, you could save tax as follows , upto Rs 8,158 per year.

Tax Benefit

Tax Slab 30.90% 20.60% 5.15% Meal
Meal Allowance* 26400 26400 26400 26400
Tax Deduction 8158 5438 1360 NIL
Net 18242 21166 25040 26400
* @ Rs. 100 x 22 Days x 12 Month

So by all means opt for meal vouchers as a perk rather than cash in your salary package . Not only can these meal vouchers be used at restaurants but they can be used to purchase groceries at a whole lot of places. But sadly you can buy only food and non-alcoholic beverages with these vouchers. The taxman couldn’t care less about your claim that you do your best work as an employee, soused !

If the worry of the hassle of paperwork related to meal vouchers, keeping safe meal vouchers and counting out vouchers of different denominations at the grocery check-out ,is making you think twice about opting for the perk of meal vouchers,these days technology can rid you of all these issues and help you live better, even as you save tax. The fintech start-up  Zeta make it possible for employers to instantly credit meal vouchers electronically to the employee’s cloud card and they can painlessly spend it via the Zeta app or  smart-card. And they can proceed to shop for food and non-alcoholic beverages online or offline and pay just as they would using an Amazon voucher, an e-wallet or plastic. And the whole thing is income tax compliant. So zero hassles. Period.


About Keerthika Singaravel

Please Leave Me Your Comments!I Love Reading Them!

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: