Have you gushed in gratitude every time you have been handed a meal coupon by your employer? After all, meal and gift coupons form a part of your salary that is tax-exempt. In fact, such coupons or vouchers seem to offer a winwin situation to all the players involved, be it the employer, retailer or the company offering the service. Most organisations consider the tax-free payment a good HR tool. The retailers and department stores opt for them to increase footfall, while the company offering the service earns a commission on them. However, these coupons come with certain limitations and inconveniences that are brushed aside.
Agreed that the coupons are income-tax free—if this amount were paid as cash allowance, it could be taxed at up to 30.9 per cent p.a. (30 per cent tax+3 per cent educational cess, for the highest tax bracket). However, they come with a ceiling. The maximum amount exempt as perquisite is Rs 50 per working day, though companies offer higher amounts as coupons. Similarly, gift coupons have a limit of Rs 5,000 for a financial year.
Moreover, you can buy items only at select outlets, restricting your bargaining power, and exchange coupons only for specific items. So even though More, an Aditya Birla Retail chain, accepts them against anything you buy, Reliance Fresh and Food Bazaar take them only against food items. Besides, some stores do not offer discounts on coupons that are available on cash payment.
A few, such as Grahaneez and LM 365, even charge 2-3 per cent more if you use the coupons. There are also stores, such as Fairprice and Suvidha, which do not deal with meal passes at all. While Sodexo, a leading provider of meal and gift coupon services, claims a network of 14,000 affiliates in 350 cities, there is no assurance that the store closest to you is affiliated to your coupon-issuer.
Subscribers of such coupons also receive 'exclusive' offers, such as a mere 5 per cent off on a Benetton watch worth Rs 2,500. What they probably also miss out on is the asterisk referring to delivery and handling charges. Besides, there is a list of terms and conditions that comes with these schemes. Usually, the company takes no responsibility for loss of coupons or shortcomings in the product/service. So, order that watch at your own risk.
Meal coupons
These can be exchanged for food items and non-alcoholic beverages. Some supermarkets allow grocery items like detergents, toiletries, etc.
Gift vouchers
These can be redeemed against electronic appliances, apparel, accessories, home decor items and consumer durables at affiliated stores.
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