If you use a meal card at work or grab lunch using office vouchers, a small change in tax rules can make a noticeable difference to your take-home savings. From April 2026, , and could quietly put more money in your pocket over the year.
The government has increased the tax-exempt limit on meals provided by employers. Earlier capped at Rs 50 per meal, the limit has now been raised to Rs 200 per meal from April 1, 2026.
This is a sharp jump and comes as a relief for salaried employees who depend on meal cards or office canteens. Importantly, this benefit will now also be available under the new income tax regime, removing a restriction that earlier limited its usefulness.
Meal cards such as Sodexo, Pluxee, or Zaggle are commonly offered by employers as part of salary structures. These are meant specifically for food expenses and, if used within the prescribed limits, are not treated as taxable income.
Gaurav Makhijani, Tax Head at Makhijani Gera & Associates, explains, “The New Income Tax Rules 2026 provide a tax-saving opportunity for salaried employees. Free food and non-alcoholic beverages provided during working hours either through office canteens or paid meal vouchers are not treated as taxable perquisites up to Rs. 200 per meal.”
At first glance, Rs 200 per meal may not seem like a big number. But over time, it adds up.
Makhijani breaks it down, “Assuming an employee works 22 days in a month and receives 2 meals per day valued at Rs 200 each, the monthly tax-free benefit will be Rs 8,800. Therefore, an annual saving of Rs 1,05,600.”
That’s over Rs 1 lakh in tax-free benefits in a year—simply by structuring part of your salary as meal vouchers.
Under income tax provisions, free meals provided by employers are generally taxable if they exceed a certain limit. Earlier, any amount above Rs 50 per meal was treated as a taxable perk.
However, there are exceptions. Under , the Income Tax Department states that free meals exceeding Rs 50 per meal (after deducting any employee contribution) are treated as taxable perquisites. Certain exceptions apply, such as meals in remote areas, office premises, or tea, coffee and snacks during working hours.
With the revised Rs 200 limit, the scope of this exemption becomes much wider.
For employees, this change makes meal vouchers far more valuable than before. It’s not just about convenience any more, it’s a smart way to reduce taxable income without changing your overall salary.
Employers, too, may start restructuring compensation to include higher meal benefits, given the tax efficiency.
In other words, a small daily allowance for meals might not seem like much. But with the new rules, it can quietly turn into one of the most effective tax-saving tools in your salary.