Meal Allowance Exemption Explained: The ₹200 Per Meal Rule
The meal allowance exemption lets employees receive up to ₹200 per meal tax-free from 1 April 2026. It applies to meals served at work and to non-transferable meal vouchers used only at eating outlets. It works under both tax regimes. A cash meal allowance does not qualify and stays fully taxable.
The name causes trouble. People search for a "meal allowance exemption", but the rule does not exempt an allowance. It sets the taxable value of an employer-provided meal at nil, up to ₹200 per meal. That is why a food card works and a line called "Food Allowance" on your payslip does not. Once you see that difference, the meal allowance exemption is easy to use.
The limit stood at ₹50 per meal for over 25 years. Under Rule 15(5)(a) of the Income-tax Rules, 2026, it is now four times higher, and the old block on new-regime taxpayers is gone. At full use, that can mean about ₹1,05,600 of tax-free meals a year.
This guide is for salaried employees first, with a short section for HR and payroll teams. It shows what the rule says, which meals count, how much it can save, and how cash, meal cards and cafeteria meals compare. Keep your payslip open as you read, because your employer's setup decides whether you get the benefit.
Key takeaways
- The tax-free limit is ₹200 per meal from 1 April 2026, up from ₹50.
- It applies under both the old and the new tax regime.
- Only meals at work and non-transferable vouchers for eating outlets qualify. A cash allowance is fully taxable.
- The ₹1,05,600 yearly figure is an example (2 meals, 22 days, 12 months), not a cap in the rule.
- Check your payslip and Form 16 to confirm your employer delivers the benefit correctly.
What is the meal allowance exemption under the ₹200 per meal rule?
The meal allowance exemption is a rule that treats employer-provided meals as having nil taxable value up to ₹200 per meal. Rule 15(5)(a) of the Income-tax Rules, 2026 sets this limit from 1 April 2026. It covers free food at work and non-transferable meal vouchers, but not cash.
Under the old rules, Rule 3(7)(iii) capped the benefit at ₹50 per meal. That figure had not moved in more than 25 years.
| Until 31 March 2026 | From 1 April 2026 |
|
| Governing rule | Rule 3(7)(iii), Income-tax Rules, 1962 | Rule 15(5)(a), Income-tax Rules, 2026 |
| Tax-free limit per meal | ₹50 | ₹200 |
| New tax regime | Not available | Available |
| Yearly example (2 meals × 22 days × 12 months) | ₹26,400 | ₹1,05,600 |
This is a valuation rule, not a deduction you claim. Your employer applies it when valuing the perquisite, so the benefit only reaches you if your salary is set up to deliver it.
Does the meal allowance exemption apply in the new tax regime?
Yes. From 1 April 2026, the meal allowance exemption of ₹200 per meal is available under both the old and the new tax regime. The old rule had a proviso that blocked it for new-regime taxpayers. Rule 15(5)(a) of the Income-tax Rules, 2026 does not carry that proviso forward.
The Income-tax Act, 2025 replaced the 1961 Act on the same date, and the CBDT notified the new Rules on 20 March 2026. Income earned in FY 2025-26 still follows the older rule: ₹50 per meal, and only for old-regime taxpayers. The ₹200 limit applies to Tax Year 2026-27, the period most people still call FY 2026-27.
Some guides online still say the new regime gets nothing. They describe the old rule or the draft version. For the payroll side of this change, read our guide to the food coupon in the new tax regime.
Which meals and vouchers qualify for the ₹200 limit?
A meal qualifies if your employer provides it during working hours at the office or business premises. A paid voucher qualifies if it is non-transferable and usable only at eating outlets. Both cover food and non-alcoholic drinks. The ₹200 limit is checked per meal.
Three things break the rule: the benefit is paid in cash, the voucher can be passed on or exchanged for cash, or the card can buy more than food. Tea, coffee and light snacks at work are usually treated as fully exempt, so they should not use up your ₹200.
What happens if a meal costs more than ₹200?
The first ₹200 of each meal is nil value. The amount above ₹200 is taxable as a perquisite. If your employer pays ₹260 for a meal, ₹60 of it would be taxable. Any part you pay yourself lowers the taxable amount. Ask your CA to confirm the sum for your case.
Do shifts, weekends and work from home count?
The rule refers to meals during working hours, so timing matters. Shift patterns at factories and shift-based sites should be spelled out in the employer's policy. A weekend or leave-day meal falls outside working hours, so do not count on it. Work from home is less clear. Expect questions on large claims. This is guidance, not a ruling, so confirm it with payroll or your CA.
How much tax does the meal allowance exemption save?
At the full limit, an employee can receive about ₹1,05,600 a year in tax-free meal value. That assumes ₹200 per meal, 2 meals a day, 22 working days a month and 12 months. At a 30% tax rate, the saving is about ₹31,680 a year before cess.
At a 20% rate, the saving is about ₹21,120. Treat ₹1,05,600 as an example, not a ceiling. The rule sets a limit per meal. Someone who eats one meal a day at work, or works 20 days a month, will have a smaller figure. Your own saving depends on your tax rate and on how many eligible meals you actually have.
Cash allowance, meal card or cafeteria: which gets the exemption?
A meal card and cafeteria meals get the exemption. A cash allowance does not. Cash paid as a food allowance is added to salary and taxed in full, whatever the payslip calls it. The same amount delivered as qualifying meals is nil value up to ₹200 per meal
| Cash food allowance | Meal card or voucher |
Cafeteria meals at work |
|
| Tax treatment | Fully taxable | Nil up to ₹200 per meal, if non-transferable and usable only at eating outlets | Nil up to ₹200 per meal, for meals during working hours at the premises |
| Record of what was bought | Payslip line only | Provider statement | Order log, if the cafeteria is digital |
| Best for | People who prefer cash and accept the tax | Staff who eat out or work across locations | Offices with an on-site cafeteria |
| Watch out for | Taxed in full | Card must be limited to eating outlets | Meals outside working hours |
as a food allowance is added to salary and taxed in full, whatever the payslip calls it. The same amount delivered as qualifying meals is nil value up to ₹200 per meal.This table is planning guidance, not tax advice. If your office has no cafeteria, a meal card is the simpler route. If you are choosing a setup for a site, this guide to the pantry, office cafeteria or food court explains how to pick. Subsidies that nobody reconciles also drift, as the piece on the hidden costs of running office cafeterias shows.
How can employers set up the meal allowance exemption?
Employers deliver the meal allowance exemption by providing meals or non-transferable vouchers instead of cash, valuing each meal against ₹200, and reporting the perquisite correctly. The benefit does not apply by default. It depends on how salary, cards and records are set up.
What should employees check in Form 16 and Form 12BA?
Check that the meal benefit shows as its own perquisite and is not merged into salary. Reporting guides say a benefit within ₹200 per meal is shown at nil value on Form 12BA. If your employer leaves it out, ask payroll to fix it before you file. A card balance you never spend is not a tax benefit.
What should HR and payroll set up?
- Replace cash food allowances with qualifying meals or cards.
- Confirm in writing that payroll treats meal benefits as available in the new regime.
- Set limits per meal, not per month.
- Limit cards to food and non-alcoholic drinks at eating outlets.
- Keep a record of what was bought, when and by whom.
An on-site cafeteria makes the record easier. HungerBox lets facility managers set meal benefits by role and works with Sodexo and Zeta meal cards, while Pay Later supports payroll-deduction models. See corporate cafeteria management for how this runs across sites. The platform gives you data and controls. The tax treatment is for your CA to confirm.
What to do next
The meal allowance exemption can be worth about ₹1,05,600 of tax-free meals a year at full use, but only when the benefit arrives as meals or non-transferable vouchers. This week, open your payslip. If you see a cash food allowance, ask HR whether it can move to a meal card or a cafeteria benefit. If you run an on-site cafeteria and want meal benefits set by role and recorded per order, talk to the HungerBox team.
Frequestly Asked Questions
Not when it is paid in cash. A cash meal allowance is added to salary and fully taxed. Meals at work and non-transferable meal vouchers are nil value up to ₹200 per meal from 1 April 2026, subject to the rule’s conditions. So the form of the benefit decides whether it is tax-free.
It is per meal. The ₹1,05,600 yearly figure comes from an example of two meals a day, 22 working days and 12 months. It is not a cap written into the rule. Each meal is checked against ₹200 on its own.
The first ₹200 stays nil value. The amount above ₹200 is taxable as a perquisite. If you pay part of the cost, that payment lowers the taxable amount. Ask your CA or payroll team to confirm the calculation for your case.
Not up to ₹200 per meal. From 1 April 2026, Rule 15(5)(a) treats qualifying meals and non-transferable vouchers as nil value under both regimes. The old rule blocked new-regime taxpayers, but that block was not carried forward. Cash and anything above ₹200 per meal remain taxable.
Weekend and leave-day meals fall outside working hours, so do not count on them. An unused card balance gives no benefit, because the exemption applies to meals actually provided or bought. Work-from-home cases are less clear, so confirm your employer’s policy with payroll.