Meal benefit needs to be revised immediately to match the
increase in food prices. Salaries earned have also
increased, but meal benefits for Indian employees have
not changed in the last 10 years.
Government should treat meal benefit limits as a priority reform.
- 1 The income tax exemption limit for meals to employees was fixed at Rs 50/ per meal in 2001 and has not been revised since then despite over 100% increase in food prices;
- 2 During the period when Fringe Benefits Tax (FBT) was applicable, the limits were removed in case of meals provided by the employer directly or through meal vouchers. A limit of Rs.100 per meal was prescribed in case of electronic meal cards. After abolition of FBT, the old provisions was reinstated but with the old limits of Rs 50 per day;
- 3 To ensure that the quality of nutrition is preserved and to encourage employers to spend more on employee meals, the limits should be enhanced by at least 100% Due to the limits being stagnant, employers have not increased their spending on the meals as a result of which the overall quality of meals to employees
Considering that the original limit was set over 10 years ago and there has been an increase of 109.50% in food prices in the past 10 years; the limit should be revised to a minimum of Rs.125 per meal from April 2012.