India’s tax reforms just handed salaried employees a surprisingly practical perk. Under the Income-tax Rules 2026, effective April 1, 2026, meal vouchers of up to ₹200 per meal are now tax-exempt under both the old and new tax regimes.
This marks a notable shift, especially since the new tax regime previously did not allow this benefit. Combined with higher limits, the change enhances take-home value without altering salary structures.
The updated rule significantly increases the tax-free threshold. Earlier, the exemption under the old regime was capped at ₹50 per meal, while the new regime offered no such benefit.
Now, employees can claim ₹200 per meal (tax-free). Assuming 2 meals per day and 22 working days per month, this translates to around ₹1,05,600 annually (tax-free). This effectively boosts disposable income, particularly for salaried professionals receiving structured benefits from employers.
As per Rule 15(5)(a) of the Income-tax Rules 2026, the valuation of employer-provided food and beverages is based on the employer’s cost, adjusted for any employee contribution.
However, certain benefits remain fully exempt:
The key condition is that vouchers must be usable only at designated eating outlets, ensuring they are used strictly for consumption purposes.
Beyond meal vouchers, the rules also expand other tax-free benefits:
These provisions apply under both tax regimes, making compensation structures more flexible and tax-efficient.
Read more: New Income Tax Act 2025: Say Goodbye to Confusion with Simpler Tax Filing Rules!
The Income-tax Rules 2026 bring a practical upgrade to employee benefits by making meal vouchers more generous and universally applicable. By extending tax exemptions to both regimes and raising limits significantly, the government has made everyday expenses like meals more tax-efficient.
For salaried professionals, this is a rare win where a small policy tweak can meaningfully improve take-home income without any extra effort.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Investments in the securities market are subject to market risks, read all the related documents carefully before investing.
Published on: Apr 6, 2026, 1:18 PM IST
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