Sometimes, relief comes not as a grand windfall, but as a modest meal made lighter on the wallet.
A Bigger Bite of Tax Relief
India’s draft Income Tax Rules, 2026 propose a significant hike in the tax-free value of employer-provided meals — from ₹50 per meal to ₹200. The change covers meal coupons, vouchers, and food cards such as those issued by Sodexo (now Pluxee) and Zaggle.
Earlier, two meals a day worth ₹50 each meant an annual exemption of ₹26,400. Under the draft rules, the same structure at ₹200 per meal could raise the tax-exempt amount to ₹1,05,600 a year, if cleared by Parliament.
Shubham Jain, Director at SVAS Business Advisors, explained that with two meals per working day, the math works as follows:
₹200 × 2 meals = ₹400 per day
₹400 × 22 working days = ₹8,800 per month
₹8,800 × 12 months = ₹1,05,600 per year
“So, a tax-free meal benefit of up to Rs 1,05,600 per year is allowed under the proposed rules.”
Gaurav Jain, Partner, Direct Tax, at Forvis Mazars in India, noted that the incremental exemption over the current ₹26,400 limit would be ₹79,200. For someone in the 30% tax bracket (plus 4% cess), this could mean savings of roughly ₹24,710 annually.
However, meal vouchers alone may not dramatically reduce tax liability. Greater savings emerge when combined with other deductions under Sections 80C and 80D in the old regime.
Old vs New Regime: The Fine Print
The benefit’s availability depends on the chosen tax regime. Under the old regime, meal vouchers remain exempt up to the revised cap if the draft rules are approved.
Under the new regime, the position is less certain. While the draft rules do not explicitly deny the benefit, the Income-tax Act, 1961 generally excludes most perquisite exemptions for those opting under Section 115BAC. As Gaurav Jain clarified, exemptions traditionally do not apply under the new regime, making such benefits taxable unless the final law provides otherwise.
Certain cases remain excluded from taxation, including meals provided during office hours within premises, tea or snacks, and food supplied in remote or offshore locations.
Dr. Raj P. Narayanam, Founder and Executive Chairman of Zaggle, said: “The recent tax reforms are a clear signal that India is moving toward a more structured and transparent benefits ecosystem. By expanding tax-efficient allowances across meal, mobility and lifestyle categories, the government has created room for organisations to enhance employee take-home value without proportionately increasing fixed costs.”
In the arithmetic of taxation, even a simple lunch can turn into a meaningful saving.
Summary
The draft Income Tax Rules, 2026 propose raising the tax-free meal allowance from ₹50 to ₹200 per meal, potentially increasing annual exemption to ₹1,05,600. Employees in the 30% slab could save about ₹24,710. The benefit clearly applies under the old regime, while its fate under the new regime depends on final legislative amendments and notifications.
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