Expenditure on food or beverages provided to the employees by employers--Extent to be treated as entertainment--Section 37(2) of the Income-tax Act, 1961--Instructions regarding - Income Tax - 727

Expenditure on food or beverages provided to the employees by employers--Extent to be treated as entertainment--Section 37(2) of the Income-tax Act, 1961--Instructions regarding. Circular No. 727 Dated 27/10/1995 To All Chief Commissioners of Income-tax, All Directors-General of Income-tax. Sir, Reference is invited to the Board's Circular No. 708, dated July 18, 1995 (F. No. 225/27/95-ITA.II)*, on the above referred subject. 2. In partial modification of the circular, the following sentence appearing at the end of para 2 :_ "In the hands of the employees, however, the amount shall be treated as income subject to the provisions of section 17 of the Act." may be substituted by the following :_ "In the hands of the employee, the amount up to Rs. 35 per day will not be treated as income, provided the amount is paid by the employer directly to the caterer, restaurant, eating place, canteen, etc." 3. This may be brought to the notice of the Assessing Officers of your region. Yours faithfully, (Sd.) H. K. Choudhary, Under Secretary, Central Board of Direct Taxes.