Fringe Benefit Tax – Pre-paid Electronic Meal Card – CBDT Prescribes Conditions
As per Section 115 WB (2) (B) of the Income Tax Act, certain food supplied by the employer to the employee would not be considered as fringe benefit provided to the employee.
A new Sub clause (iii) is inserted into this sub-rule with effect from 1.4.2009, which reads as,
“any expenditure on or payment through non-transferable pre-paid electronic meal card usable only at eating joints or outlets and which fulfils such other conditions as may be prescribed. ”
Now the Board has prescribed the conditions by inserting Rule 40E in the Income Tax Rules.
(i) The card shall be granted by the employer to its employees under a scheme framed by the employer specifying the circumstances under which the meal card can be used by the employee.
(ii) The card shall be issued by the issuing bank.
(iii) An employee shall not be issued more than one card.
(iv) The card shall bear the name of the employer along with the name, photograph and signature of the employee to whom the card is issued.
(v) The card shall be used only by the employee to whom the card is issued.
(vi) The card shall be used by the employee only for the purpose of purchasing ready to eat food or non-alcoholic beverage from a member establishment.
(vii) The aggregate amount of ready to eat food or non-alcoholic beverage purchased during a day by an employee shall not exceed one hundred rupees.
(viii) The details of each transaction of purchases made by the employee against the card shall be maintained by the employer and the member establishment in such manner and for such period as is required under the Act for any other similar transaction.
CBDT Notification No. 1/2009, Dated: January 5, 2009