Imagine earning a CTC of ₹15.85 and still legally owing zero income tax. For FY 2026-27, the new income tax rules, 2026, have made meal vouchers a powerhouse under the new tax regime. Thus, effectively lifting the zero-tax ceiling from ₹12 lakh to ₹15.85 lakh.
This can be a boon for salaried individuals and market professionals working in IT, finance, and media, aiming to maximise their take-home salary without exceeding the 30% slab. The core concept applied here is employer-provided meal vouchers (such as Sodexo cards), now exempting up to ₹200 per meal, as defined under Section 115BAC. If planned correctly, it carves out real taxable income. Let us look at the meal voucher breakdown and an example to better understand this.
Meal voucher breakdown
|
Component |
Amount |
|---|---|
| Per-meal exemption | ₹200 |
| Meals per day (assumed) | 2 |
| Working days per month | 22 |
| Monthly tax-free benefit | ₹8,800 |
| Annual reduction | ₹1,05,600 |
When you apply the above bifurcation to a CTC of ₹15.85 lakh, the basic salary is generally 50%, i.e., 7.92 lakh. Subtract exempt employer PF (12% of basic), ₹75,000 standard deduction and NPS contribution (14% basic under Section 80CCD(2)).
In such cases, the meal exemption applies upfront, reducing net taxable income below ₹12 lakh and qualifying for the full Section 87A rebate. For better understanding, go through the following table.
Tax saving calculation with a simple example
Under the new tax regime, here is how you can reduce your tax liability for FY 2026-27 if your annual CTC is ₹15.85 lakh.
|
Particulars |
Amount |
|---|---|
| Annual CTC | ₹15,85,000 |
| Basic Salary (50% of CTC) | ₹7,92,500 |
| Less: Meal Exemption ( ₹200/meal x 22 days x 2 meals/day x 12 months) | – ₹1,05,600 |
| Less: Exemption on Employer’s PF Contribution (12% Basic) | – ₹95,100 |
| Less: Standard Deduction | – ₹75,000 |
| Net Salary | ₹13,09,300 |
| Less: Employer’s NPS (Section 80CCD(2), 14% Basic) | – ₹1,10,950 |
| Taxable Income | ₹11,98,350 |
Table courtesy: ClearTax
It is important to note that this example assumes salary is the only income, meal vouchers are employer‑issued and reported correctly, and CTC is structured optimally. Actual tax liability depends on employer policy, terms and the final details in the new TDS certificate, Form 130 under the Income Tax Act, 2025.
In conclusion, with a taxable income of ₹11.98 lakh, you are clearly below the ₹12 lakh threshold. If you claim the rebate with proper planning, your tax liability will hit zero. Furthermore, ensure you are receiving employer-issued vouchers (no cash) for FY 2026-27 only, along with your salary, as your sole income.
For better understanding and clarity, you should reach out to your concerned company’s human resources official and, separately, a tax advisor to plan and structure this correctly, as this legal tweak can help put more money in your pocket.
Disclaimer: This information is for general awareness only and should not be treated as tax, legal or financial advice. Tax laws are subject to change, and individual applicability may vary based on specific circumstances. Please consult a qualified tax or financial expert before making any tax or investment decisions.
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