The Indian government’s draft Income-Tax Rules for 2026 propose a significant change for salaried employees. The tax-free limit on meal vouchers and subsidised office meals may go up from Rs 50 per meal to Rs 200 per meal. If approved, this may allow employees to claim up to Rs 1.05 lakh per year as tax-free benefits, provided they meet the conditions of the chosen tax regime. This will bring major relief to those who use vouchers such as Sodexo (Pluxee) or Zaggle, or rely on office canteens.
However, the rules also make company car perks more expensive. Employees who use cars provided by their employers for both work and personal purposes will face higher taxable amounts. For someone earning Rs15 lakh annually, the extra tax could be about Rs 4,352, while for a salary of Rs 25 lakh, the additional tax burden may reach Rs 8,387.
The calculation is based on fixed values: if the employer covers fuel and maintenance, the taxable perk is set at Rs 5,000 per month. If a driver is also provided, another Rs 3,000 per month is added. Together, this totals Rs 8,000 per month or Rs 96,000 per year, which will be added to the employee’s taxable income.
Experts note that the way perks are valued remains the same under both the old and new tax regimes. While the new regime offers lower tax rates but fewer exemptions, it does not change how benefits such as cars are taxed.
The draft rules balance relief with stricter compliance, offering a win for employees through higher tax-free meal benefits, but also tightening taxation on company car perks.