Budget 2017 should look to increase the limit for meal benefits by the employer should be hiked to Rs 200, from the current Rs 50, recommends CII. In its pre-Budget 2017 memorandum, the Confederation of Indian Industry (CII) says, “Para (iii) of sub-rule 7 of Rule 3 prescribes the valuation norms for free food and non-alcoholic beverages provided by the employer to an employee during working hours. A limit of Rs 50 per meal has been prescribed up to which the said benefit is not taxable in the hands of the employee. This limit of Rs 50 was introduced in 2001.”
“Keeping in mind that the original limit was set over 15 years ago and the significant increase in food prices in the past 15 years, it is suggested that the limit should be increased to a minimum of Rs 200 per meal in line with the inflation since 2001,” CII has urged Finance Minister Arun Jaitley.
Further, CII notes that the provision of electronic meal card to employees is not specifically included in Rule 3(7)(iii). “However, the same was mentioned during the FBT regime. Accordingly, confusion arises whether or not electronic meal cards are covered by Rule 3(7)(iii),” it says. “It may be specifically clarified that benefit of Rs 50 per meal shall be extended even to electronic meal cards as was extended in the FBT regime,” it adds.
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CII also recommends that Budget 2017 should increase the limit of tax deduction under Section 80C to Rs 2.5 lakh from the present Rs 1.5 lakh. “Limit of deduction under section 80C may be increased to Rs 250,000. A new section should be inserted under Chapter VI-A which provides for deduction of contribution to provident fund from the gross total income in addition to deduction under section 80C. This would encourage investments in other schemes provided in section 80C and increase the liquidity and investments in the country,” CII believes.
“To make the term deposits at par with ELSS, the lock in period for 80C should be reduced from present five years to three years. To induce long term savings through fixed deposits it is essential to remove the tax arbitrage. Further, this would be revenue neutral as there will be no loss to the revenue,” CII adds.
