Meal voucher exemption increased under new tax rules: How this may affect your take-home pay

Salaried employees receiving meal vouchers such as Sodexo, Pluxee or Zaggle will see a more generous tax treatment now. The updated Income-tax Rules, 2026 raise the tax-exempt limit on employer-provided meals from ₹50 to ₹200 per meal and extend this benefit across both the old and new tax regimes.

What has changed

The revised rules remove earlier ambiguity around the treatment of meal vouchers under the new tax regime. Now, meal vouchers up to ₹200 per meal qualify as tax-free irrespective of the regime an employee chooses. Earlier, the exemption was limited to ₹50 per meal under the old regime and was not available under the new regime.

How the exemption works

Under Rule 15(5)(a) of the Income-tax Rules, 2026, the value of food and non-alcoholic beverages provided by an employer is calculated as the employer’s cost minus any amount recovered from the employee.

However, this valuation does not apply in specific cases:

• Free meals or vouchers used at eating joints during working hours, up to ₹200 per meal
• Tea or snacks provided during working hours
• Meals provided in remote areas or offshore installations

In these cases, the benefit remains tax-exempt within the prescribed limits.

What it means for employees

The change simplifies tax treatment and makes meal vouchers more attractive as a salary component. Employees under the new tax regime, who previously could not claim this benefit, will now be able to do so. This could also prompt employers to restructure compensation packages to include higher meal allowances.

ALSO READ | New income tax rules: Key TDS changes salaried employees must note

Other related exemptions

The rules continue to allow:

• Tax-free gifts, vouchers or tokens up to ₹15,000 annually
• Tax-free loans up to ₹2 lakh for treatment of specified diseases