₹200 per meal rule explained: How you can maximise tax savings under new, old tax regimes

The latest income tax rules have made food card benefits more attractive, especially for those opting for the new tax regime. From April 1, 2026, the tax-free limit on employer-provided meals has been increased to ₹200 per meal, up from the earlier ₹50. More importantly, the earlier restriction that excluded this benefit under the new tax regime has been removed, opening the door for wider usage.

This is a significant shift because meal benefits are not treated like deductions such as Section 80C. Instead, they fall under salary perquisite rules. In simple terms, if structured correctly, the value of meal benefits is excluded before calculating taxable salary. This means it does not get taxed at all, making it an efficient way to reduce your overall tax liability.

New Tax Regime 2026

For salaried individuals who prefer the new tax regime due to its lower tax rates but fewer exemptions, this change adds a practical tax-saving component without complicating compliance.

However, the benefit is not automatic and comes with specific conditions. The ₹200 per meal exemption typically assumes two meals a day, taking the daily tax-free value to ₹400. But this applies only to working days and must be aligned with actual office attendance, usually around 20–22 days a month.

The usage of food cards is also tightly defined. These can only be used for food and non-alcoholic beverages. Expenses such as groceries or non-food items are not eligible. Additionally, the benefit must be provided by the employer as part of the salary structure—self-funded or reimbursed expenses do not qualify.

The ₹200 limit per meal is strictly enforced. Any amount exceeding this threshold becomes taxable as a perquisite. The benefit also covers snacks and beverages consumed during working hours, including tea, coffee, breakfast, or light meals.

Food cards offered by providers such as Sodexo, Pluxee, and Zaggle are commonly used for this purpose. When issued and used in line with tax rules, they allow employees to cover daily food expenses while keeping that portion of income tax-free.

Overall, the updated rules make fod cards a relevant and efficient tax-saving tool under the new regime, provided they are structured and used correctly.

Old Tax Regime 2026

Under the new Income Tax Rules, 2026, salaried employees opting for the old tax regime can claim a significantly higher tax exemption on employer-provided meal benefits. The exemption limit has been increased from ₹50 per meal to ₹200 per meal, allowing a maximum annual tax-free benefit of up to ₹1.05 lakh, compared to the earlier ₹26,400. This applies to meal coupons, cards (like Pluxee/Sodexo, Zaggle), or subsidised canteen meals. For employees in the 30% tax bracket, this enhancement can lead to annual tax savings of around ₹24,000–₹25,000, improving take-home pay.

Additionally, companies are increasingly using fuel cards and corporate expense cards instead of cash allowances. Fuel expenses reimbursed for official use can remain tax-free if properly documented, reducing taxable income. Similarly, corporate cards for business expenses ensure better compliance and tracking. Overall, these changes promote structured compensation and offer meaningful tax efficiency benefits to employees.