Income Tax Notice For Sodexo Coupons

Yes,

The concerns are understood...

However, the PIL (language) seems to be blaming the customers / shoppers who pay sodexo coupons to buy whatever at groceries or wherever...

If the thing is that these outlets are in a way or other forced by such meal vouchers company, there should be a case against them...

Secondly,

as an employee as well as the HR, my argument is -

1. We would always prefer giving away cash to employees as meal allowance (whatever the prescribed limit)

2. We give sodexo or other similar coupons because they are being promoted as a tax free item

3. While doing a study research last year while I was in a need to understand this Meal Allowance, I came across few links that mentioned, if we give cash as meal allowance, we attract tax beyond prescribed limit however meal vouchers like sodexo coupons are tax free to the whole amount given as meal allowance....

[Example -

Since, paid vouchers have been covered under chapter XII H and are also not a prescribed perquisite for valuation they will not be taxable in the hands of employees.

attribution https://www.citehr.com/136089-sodexh...#ixzz2l4pz4nu9

Can be encashed by anyone and for purchase of groceries too.

attribution https://www.citehr.com/97630-sodexho...ixzz2l4v1H5qd]

In all these who is at fault and who will be paying a price for it?

The concern and the point that I want to make is only so much - When things are actually wrongly promoted by the company, there is not point in blaming employees. Such meal coupons vending companies do actually say we can use it anywhere (even to buy groceries) so ideally, as an employee / layman / I am not violating law as I trust the company who guided me before I opted for such meal coupons...

Again as you mention meal allowance is a concept similar to conveyance allowance - we get money for it irrespective of the fact that we use it or not for prescribed purpose. I may be staying next door of the firm I work for, yet I am eligible to get 800 as my conveyance. Similar way I should be getting my meal allowance. So if I am getting my meal allowance paid in cash, I would use this cash to buy flour and vegetables so that I can cook my tiffin. But if I get sodexo or alike coupons, I use them to buy packet items or similar stuffs so that I can pack my tiffin. How is this illegal? This is something I didn't understand.

The reason I am stretching on it is because that is how the PIL has been framed...

1.How can grocery stores and malls accept such coupons if the allowance is for ready to eat Meal? Isn’t this illegal to claim tax benefit for shopping groceries?

2. How can the coupons be redeemed in bulk? The exemption is for Rs 50 spent every day on meal. - I gave a scenario in my last post and hope it is reasonable enough to spend it in bulk then...

Again as you said,

there are many places where such food coupons are not accepted, we don't force them either.

There are many instances wherein our coupons are wasted because they're to expire and we don't have much on list to buy (we never get refund for those wasted coupons)

it's a 50-50 scenario for employees as well.... They may be able to take some advantage once in a while, but most months, there are many denominations that go wasted.... and about tax saving, the amount of tax saved by these employees will match anyway the amount wasted by such coupons.... [in the even sodexo / alike company was profitted, so we should instead have proper means to tax such companies)

Ankita,
You have hit the nail on the head.
When FBT was in force, the coupons made sense as it was saving FBT
Now, it does not have any value as such.
The only thing is that :
a. Most HR / Finance departments in large companies have not bothered to review the matter and inertia is continuing.
b. Its done in other countries abroad so its done here by MNCs without realising whether its efficient in india
c. Accor and sodexo stress the tax free status without telling that even if they were to give the money as reimbursement the matter would be same for the company.
I have not read the PIL so dont know the wording.
However, there was no logic to granting special status to these coupons except that there was probably large amount of money paid to the minister to allow it to happen.

I appreciate and echo the sentiments expressed by Ankita.
Salaried employees, as a class, deserve more leniency and tax-breaks, as they can not escape or evade taxes.They are the ones who diligently pay (or are required to pay) Income Tax every month even before it is due to be paid as Advance Tax by other categories of tax-payers.
Although there is no escape from Income Tax, at least they should be made to feel proud as honest tax-paying citizens of the country, instead of false aspersion being cast upon them for doubtful notional evasion of taxes.
Warm regards.

""I think you are psycho guys, in kejri languagge you are a psychopath,""
""What i want to say , you are just a bullshit guy who have that much of free time.""
Language not appreciated.
You are in a professional forum,whatever be the merits and demerits of your argument-courteous language is of prime necessity.

My quick 2 cents:

1. Pls interpret the law carefully. The law says Rs 50 per meal and not Rs 50 per day. It does not define meal. As per honourable supreme court, if definition is not specified in law, leading dictionaries can be consulted. It also adds Tea and snacks in the law. snack is also defined as a light meal. There is absolutely no harm in taking 2 meals or even 2 and a half meal per day. Rs 50 fr breakfast, Rs 50 for lunch and Rs 25-35 for tea or snack.

2. The law talks about working hours, not normal working hours. Working hours does not necessarily mean an employee has to sit in office. IT company employees even work from home or work on Sundays. All this is considered as working hours. An overtime is also considered as working hours. The per day allowance can be decided on all these factors.

3. Valid point made by PON. The grocery is bought to prepare meals to be consumed in office hours.

4. It is the obligation of Retail store to ensure that coupons are only redeemed against food or non alcoholic beverages. The employee is under no obligation if the retail store is flouting rules. All national chains like Big bazaar, Spar, Hypercity, Reliance fresh, More, Spencers etc accept only for food and non alcoholic beverages.

5. To put in public forum that 2 Food coupon companies bribed the IT dept is grossly misjudged. Do you have any proof Coz this can go against you?

6. Like conveyance, even Sodexo coupons are tax free without having to submit any proofs. In fact it is the only instrument which allows you to save some tax even if you have not made any investments. Coz this is a part of CTC.

7. Pls get a life if you don't like Sodexo coupons. Lakhs of employees are getting benefitted due to this.

8. If any outlet is overcharging for accepting Sodexo coupons, pls bring it to Sodexo's notice. They shall immediately black list the outlet. It has zero tolerance towards this. Not a single extra penny has to be given over and above the bill value when paid by Sodexo coupons.

Cheers!!

Quick points.

1. Law says Rs 50 per meal.It does not say Rs 50 per day. It used to be Rs 35 per day till 2001. Then it was changed because for 10-12 hours of work, 1 meal is not sufficient. Does the law say how many meals? You work from 9-6 in a general shift. If you add travel time from home - office - home, you are away from home for almost 10-12 hours. One meal does not suffice hence companies take 2 meals. If you add tea or snack in your company policy, you can still give an additional Rs 25 or Rs 35 worth of coupons. In total you can always give Rs 100-150 per day. The law needs to be interpreted carefully. Do you know that in UK, now even the travel time from Home - office - home has been added to your working hours. Similar petition is in India.

2. The law says Working hours. Law does not specify or define Working hours. Working hours should not be confused with Office timings. Today we carry our laptops home. Sometimes we take calls with Onsite clients even at midnight. Sometimes, we prepare a PPT on a Sunday for a meeting on Monday. These are all working hours. I reiterate, interpretation of Law is very important.

3. Even in Grocery stores or Hypermarkets, you get ready to eat food. Also, maximum employees either have health issues or do not like eating outside. Hence they purchase grains and vegetables from coupons, prepare the meal at home, bring it to office and have it in "so called working hours" How are they wrong then? How can they be proved wrong in this scenario.

Regards

Rahul