Sodexo Meal Card: Tax Benefits and Exemption Rules Under the New Tax Regime

Employee benefits are given significant attention in the current workplace scenario, supporting employees. Sodexo Meal Card is one solution that enhances the employee experience by offering meal allowances. An organization can conveniently provide a Sodexo Meal Card, which includes benefits such as tax exemptions, making it appealing to employees and employers. An average salaried individual would always look for tax-saving tips.

These benefits directly influence employee’s daily lives and financial well-being. In this article, we will provide insight into the operational efficiencies of Sodexo meal cards, the financial benefits they offer, and how they contribute to employee satisfaction.

What is a Sodexo Meal Card?

Sodexo Meal Card is a prepaid meal card popular among employers. Employees can use the card to pay for meals, groceries, and non-alcoholic beverages. The card is widely accepted in more than 1700 cities and towns across India. Merchants like Swiggy, Zomato, Burger King, Pizza Hut, KFC, Spencer’s, Big Bazaar, etc., partner with Sodexo Meal Card.

The Sodexo Meal Card looks just like our normal debit card, with similar details like name, date of issue, and expiry. The main purpose of this card is to manage employee meal-related expenses.

When you join a company that has partnered with Sodexo to provide the Sodexo Meal Card, it is better to make one to avail yourself of the offered benefits. However, the amount you can load in your Sodexo Account is limited, which is included in your Cost to Company (CTC).

This typically depends on the employer’s policies and the terms of the agreement. The amount spent on the card is deducted from your salary before tax payment, helping you save tax. A PIN or OTP for the transaction is required every time you use the card.

Know about the Tax Benefits of Sodexo Meal Cards

According to the Income Tax Act, 1962, Sodexo Meal Card can be exempted from tax but not fully exempted. Now, let’s have a look at the tax benefits of Sodexo Meal Cards;

As per Section 17(2)(viii) read with Rule 3(7)(iii) of the Income Tax Act, meals provided by the office at the workplace up to Rs 50 per meal are not taxable. For Example:

• Your meal costs Rs 85. Then, the excess amount from Rs 50, i.e. Rs 25, will be taxed, not the total amount.   
• So, Rs 2200 is spent on 22 working days with two daily meals. This implies a yearly exemption of up to Rs 26,400.

Following free meals shall be exempt from tax;

• Food and non-alcoholic beverages provided during working hours in remote areas or in an offshore installation;
• Tea, Coffee, or Non-Alcoholic beverages and Snacks during working hours
• Food in office premises or through non-transferable paid vouchers usable only at eating joints provided by an employer is not taxable if the cost to the employer is Rs. 50(or less) per meal.

Employees can choose the spending limit on their Sodexo Card. The amount is deducted from the employee’s salary before payment.

This way, the amount employees receive (home take pay) after deducting the amount involved in the Sodexo account will be treated as the total salary. The amount employees spend from the Sodexo card will not be counted as a total income, minimizing the employee’s payable tax amount.

Of course, it is an important benefit, as you enjoy the meal and save on taxes. However, it is important to understand that Sodexo Meal Cards do not carry a 100% tax exemption.

Transform your meal benefits into tax savings, file your income tax return easily, and ensure you are making the most of your Sodexo meal card tax-exempt.

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Glimpse about the Tax Implications on Sodexo Meal Card

Know a glimpse of the tax implications on Sodexo meal card:

·  New Tax Regime

Under the New Tax Regime, employees cannot claim tax benefits from Sodexo meal cards. Any amount loaded on the Sodexo account will be counted in the employee’s total income.

·  Old Tax Regime

Employees opting for the old tax regime can claim the tax exemption on the Sodexo meal card up to Rs. 12,000 per year. The exemption does not apply to groceries or non-food items. This limit is applied to the combined value of meal coupons or cards.

Don’t let tax changes catch you off guard, so secure your savings and get simplified tax filings and registration services to maximize your Sodexo meal card benefits.

What are the Benefits of Sodexo Meal Card?

Sodexo Meal Card benefits for both the employer and the employee are given below:  

Employer Benefits

• Tax Saving: When a company offers meal benefits to the employer, they can avail of tax exemptions as government rules provide. These benefits can be deductible as business expenses. Sodexo Card directly contributes to their daily well-being and work-life balance.
• Employee Satisfaction: Employees who receive meal benefits feel valued for their work. This satisfaction makes them more dedicated and efficient, increasing productivity.
• Administrative Ease: It eases the burden of the HR department, as its features provide clear insights, making it easier to analyze the data without delays and confusion. Hence, HR has time to focus on other important work.
• Savings for Employees: The card provides discounts and offers that extend meal benefits. Employees who benefit from the offers create a better work environment with more engagement, productivity, and loyalty.

Read more Blogs: Form 10BD of Income Tax Act: A Guide to Compliance

Employee Benefits

• Convenience: The Sodexo Card allows quick and effortless transactions. It also comes with online tracking that helps you manage your budget.
• Flexibility in Dining Options: Employees can choose any dining option according to their preferences. Meals have become more enjoyable and convenient, contributing to employee satisfaction and a positive workplace atmosphere.
• Budgeting: The card limits the amount that can be spent. Knowing their limit helps employees make purchases. This minimizes overspending, leading to improved budgeting skills and reduced financial stress.
• Rewards and Discounts: Sodexo cards include rewards programs or exclusive discounts at partner merchants. Employees receive points or discounts, which makes them feel that their spending is rewarding.

Should You Use a Sodexo Meal Card?

Using a Sodexo card is totally up to you. You should consider the area you live in.

• Tier 1 City: Cities like Bengaluru, Delhi, Chennai, Hyderabad, and Mumbai are Tier 1 cities in India. Many stores in these cities accept the Sodexo card, which is easier to access. If you live in a city where the Sodexo card works, you can make the most of it by utilizing it appropriately. As you know, it helps reduce your tax, so you should consider using it.
• Tier 2 & 3 City: Bhopal, Lucknow, Jaipur, Rohtak, and Udaipur are some Tier 2 & 3 cities in India. If you live in any of these cities, you must check the stores around you that accept Sodexo Cards. Taking the card is not worth it if you cannot access the benefits whenever you want. Your money will just get stuck and unused.

Conclusion

Sodexo Meal Card enhances the employee experience by offering meal allowances. It provides satisfaction and financial well-being for both the employer and the employee. Employees who feel valued create a better work environment and work with full dedication, increasing productivity. Using a Sodexo Meal Card is an option, but employees should research whether they can utilize it whenever needed.  

Visit our website, https://corpbiz.io/,  to maximize your meal benefits and minimize your taxes with the Sodexo meal card and enhance your employee experiences.

Frequently Asked Questions

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