Flexible Benefit Plan (FBP)

A Flexible Benefit Plan lets employees allocate part of their salary across a set of allowances that match their actual spending — a fuel or vehicle allowance for commuting, meal vouchers for workday food, or an internet allowance for remote work — instead of receiving that portion as fully taxable Special Allowance.

Structuring allowances around real expenses through an FBP claims legitimate tax exemptions and increases net pay without changing the underlying CTC. Meal vouchers, for example, are tax-exempt up to ₹200 per meal under the Income-Tax Rules, 2026 (effective FY2026-27, up from ₹50 previously) — and the exemption now applies under both the old and new tax regimes. Only non-transferable vouchers qualify; a cash food allowance is fully taxable.