Using Old tax regime? Your food card could save you over ₹1 lakh here’s how

Starting April 1, salaried employees receiving meal benefits such as meal coupons, meal cards (Pluxee/Sodexo, Zaggle), or subsidised office canteen food can claim a higher income tax exemption of up to ₹1.05 lakh per year under the old tax regime, following the implementation of the new Income Tax Rules, 2026, approved by Parliament last week.

Earlier, the tax exemption on such benefits was capped at ₹50 per meal, meaning only ₹100 per day for two meals was tax-free. The new rules raise the limit to ₹200 per meal, significantly increasing the tax-free allowance. With this revision, employees receiving two meals per working day throughout the year could claim up to ₹1,05,600 annually as tax-exempt, boosting their effective take-home salary.

How meal cards help save tax

Meal cards, issued by employers through providers such as Pluxee (formerly Sodexo), Zaggle, Zeta, or similar platforms, allow employees to pay for food and beverages through prepaid vouchers or digital wallets provided as part of the salary structure.

Under the earlier rules, employees could claim tax exemption of up to ₹50 per meal when the benefit was provided by the employer. This worked out to:

₹50 × 2 meals × 22 working days × 12 months
Total tax-free value: ₹26,400 per year

Under the Income Tax Rules, 2026 approved by Parliament, the limit has been increased to ₹200 per meal, which means:

₹200 × 2 meals × 22 working days × 12 months
Total tax-free value: ₹1,05,600 per year

For employees in the 30% tax bracket, the higher exemption could translate into tax savings of around ₹24,000–₹25,000 annually, depending on salary structure.

Benefit under Old Tax Regime

The higher exemption will be available only to taxpayers who opt for the old tax regime, which allows exemptions and deductions through allowances and perquisites.

From April 2026, the new tax regime continues to remain the default, meaning employees must actively choose the old regime if they want to claim benefits such as meal vouchers, fuel reimbursements, and other tax-free allowances.

Experts say this makes salary structuring more important, especially for mid- and high-income employees who can benefit from tax-efficient components.

Fuel cards and corporate cards

Along with meal vouchers, companies are increasingly shifting from cash allowances to fuel cards and corporate expense cards, as these allow better tracking of expenses and easier tax compliance under the new rules.

Fuel cards can be used for official travel expenses and may remain tax-free if proper records are maintained. When reimbursements are made against documented business use, the amount is treated as a business expense instead of taxable salary.

For example, if an employee receives ₹20,000 per month as taxable travel allowance, the full amount becomes part of income. But if the same amount is reimbursed through a fuel card for official use, the tax liability can be reduced significantly.

Corporate expense cards are also being used for travel, client meetings, and office-related spending, as digital records help companies maintain audit trails and comply with tax rules.

Structured benefits

Tax experts say the shift under the Income Tax Rules, 2026 reflects a broader move toward structured, trackable benefits instead of cash allowances.

Digital payments create clear records, reduce misuse, and make it easier to verify whether expenses qualify for tax exemption. This improves compliance while also allowing companies to design salary packages that increase take-home income without raising overall cost to the employer.

However, cash allowances may still remain common in smaller cities and informal sectors where digital acceptance is limited.

What employees should check before April 1

With the new Income Tax Rules, 2026 coming into effect from April 1, salaried employees may need to review their salary structure and tax regime choice.

Those who stay in the old regime can benefit from the higher tax-free limit on meal cards and other perquisites, while employees who continue in the new regime may not be eligible for these exemptions.