If employer provides free food and non-alcoholic beverages to an employee, it shall be treated as perk for the employee. The value of this facility shall be the amount of expenditure incurred by the employer for this purpose. However, the amount so determined shall be reduced by the amount, if any, paid or recovered from the employee for such benefit or amenity.
Value of perk = (Amount spent by employer) — (Amount charged/recovered by employer from employee)
Cases when Food and beverage facility is Exempt :
Free food or non-alcoholic beverages provided by employer during working hours provided in a remote area or an off-shore installation.
Tea or snacks provided during working hours.
Food or non-alcoholic beverages provided by employer during working hours at office or business premises or through paid vouchers which are non-transferable and usable only at eating joints, shall be exempt upto ` 50 per meal. However, if the cost per meal exceeds ` 50 then excess shall be taxable as perk for employee.