The Draft Income Tax Rules, 2026 propose a higher tax-free limit on employer-provided meals. If approved, the exemption on meal coupons, food cards, and subsidised office meals will increase from ₹50 per meal to ₹200 per meal. The change is designed to reduce tax on small workplace benefits and improve take-home value for employees.
What Has Changed
Earlier, meals provided by an employer up to ₹50 per meal were not treated as taxable income. Many companies offer two meals per working day through canteens or prepaid food cards. Under the proposed rule, the tax-free limit will rise to ₹200 per meal, allowing a much larger portion of this benefit to remain exempt.
Employees receiving meal benefits through providers such as Pluxee or Zaggle are likely to see the most direct impact once the rules are notified.
How Much Can You Save Annually
The increase may look small per meal, but the yearly impact is significant.
₹200 per meal × 2 meals per day × 22 working days per month
= ₹8,800 per month
= ₹1,05,600 per year
If the proposal becomes law, salaried employees who receive regular meal benefits could reduce their taxable income by more than ₹1.05 lakh annually.
Who Benefits the Most
Employees working in organisations that provide subsidised canteen meals or structured meal voucher programs will benefit the most. Companies may update salary structures to include the higher exemption once the government issues final notifications.
Old vs New Tax Regime
Earlier, meal vouchers were treated as tax-exempt perquisites within prescribed limits. The draft rules mainly revise how these benefits are valued. Whether the exemption will apply fully under the new tax regime will depend on the final amendments and official notifications issued after approval.
What to Expect Next
The proposal is still in draft form. Employees should watch for government announcements and HR updates from their companies. If implemented, the revised meal voucher exemption will become a simple and effective way to improve annual tax savings without changing overall salary.
