12/5/24, 9:47 AM

ERP Human Capital Management

Generated on: 2024-12-05 09:47:40 GMT+0000

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Getting Started in PY-IN

Component Name Created By Creation Date

PY-IN Form 16 - New Format Karthik 7-Jun-2019

PY-IN Chapter VI - Sec 80 Karthik 19-May-2015

PY-IN S89 Relief Calculation Karthik 18-Mar-2016

PY-IN Professional Tax Chetan 14-Mar-2014

PY-IN PTAX - Deduction Carry Forward Karthik 30-Nov-2015

PY-IN PTAX - Gross Carry Forward Karthik 30-Nov-2015

PY-IN PTAX - Retroactive PTAX Region change Karthik 18-Dec-2015

PY-IN Calculation of HRA exemption in Payroll thru INHRA function Ramana 30-June-2016

PY-IN Car and Conveyance Chetan 14-May-2015

PY-IN PF- Employee PF Rounding on Arrears Ramana 30-Dec-2015

PY-IN Income Tax Surcharge Calculation Since 2013-14 Chetan 10-Dec-2015

PY-IN Multiple Form 16 Ramana 21-Apr-2016

PY-IN Calculation of Provident fund for an employee for mid-month joining leaving or transfer scenarios Ramana 30-Dec-2015

PY-IN Tax Rounding in Payroll Driver Aman 27-May-2016

PY-IN Calculation of Tax on Income from Other Sources Aman 01-June-2016

PY-IN Car And Conveyance Perk from Act Expn OYCS wage type Chetan 04-June-2016

PY-IN Car And Conveyance COCS Employer Maintained 2 Cars 2 Drivers Chetan 04-June-2016

PY-IN Wage Type /4MI calculation based on Feature 40MWT in retro Karthik 22-Jun-2016

PY-IN NPS -Additional Deduction under Section 80CCD (1B) Scenario 1 Ramana 02-July-2016

PY-IN NPS -Additional Deduction under Section 80CCD(1B) Scenario 2 Ramana 02-July-2016

PY-IN Tax rate ‘INBTD’ Regular run calculation for April Payroll different to Marginal Tax Rate (WT /404) Karthik 18-Jul-2016

PY-IN-PS Tax Simplifier Statement Chetan 17-July-2016

PY-IN ESI - Salary Changed Retrospectively: Positive Arrears Chetan 01-Feb-2019

PY-IN Retro Salary Change Scenario & Net Payment Calculation Behavior Chetan 07-Feb-2019

PY-IN Due to Retro Salary increase how WT /551, /552 and /553 are calculated Karthik 04-Apr-2019

PY-IN Payroll Rerun for the same period after Pre-DME before Exit Payroll due to Salary Karthik 05-Apr-2019

Increase

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PY-IN Calculation of Perk on Employer Contribution above limit of INR 7.5L as Aman 05-Aug-2020

per Budget 2020-21

PY-IN HRA calculation - Difference between INMHR and INHRA Aman 31-March-2021

PY-IN INVAL A - Indirect Valuation (Variant A) Aman 14-July-2021

Calculation of HRA exemption in Payroll thru INHRA function

Disclaimer: "Image/data in this Support Content is from SAP internal systems, sample data, or demo systems. Any
resemblance to real data is purely coincidental."

Purpose:

The purpose of this Support Content is to understand the PY-IN topic which deals with the calculation of/4E4 -HRA Annual
Exemption wage type in payroll for an employee who is staying in a rented accommodation & non- metro city.

Overview:

To know more about this behavior, we must first review the necessary information, and then know how to reproduce it so that we
can understand the reason of it.

1. Obtaining the necessary information:

For replicating the above scenario, let us take an example of an employee hired from 01.04.2016, with a monthly basic salary of
Rs.80,000.00 and paying a monthly rent of Rs.24,000.00 .Further he gets an amount as Rs.40,500.00 as actual HRA paid thru
infotype 0008.

2. Reproducing the behavior:

a)Employee in this case is hired from 01.04.2016, with a basic salary of Rs.80,000.00 per month. Also he gets an amount as
Rs.40,500.00 as actual House Rent Allowance paid thru infotype 0008.

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b)Further Infotype 0581 is maintained where the rent amount paid is Rs.24,000.00

c)Payroll is now executed for the employee for the period April 2016, and INHRA payroll function has the following values
calculated:-

HRA exemption is always calculated as the minimum of the following 3 factors:-

1.Actual house rent allowance received from your employer

2.Actual house rent paid by you minus 10% of your basic salary
3.50% of your basic salary if you live in a metro or 40% of your basic salary if you live in a non-metro
This minimum of above is allowed as income tax exemption on house rent allowance.

In the above calculations, always the ANNUAL values are taken for the income tax exemption.

1.Actual house rent allowance received from your employer

Elig (Annual) = Elig(YTD) + Elig (Curr Mon) + Proj Months * Latest Value
486.000,00 = 0,00 + 40.500,00 + 11 * 40.500,00

2.40% of your basic salary if you live in a non-metro.

Basis (Annual) = Basis(YTD) + Basis (Curr Mon) + Proj Months * Latest Value
960.000,00 = 0,00 + 80.000,00 + 0,00 + 11 * 80.000,00
384.000,00 = 40,00 * 960.000,00 / 100,00
3.Actual house rent paid by you minus 10% of your basic salary
192.000,00 = 288.000,00 - { 10,00 * 960.000,00 }

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In this case minimum of the three is Rs.192,000.00 , and this is the value of /4E4 as calculated in payroll.

The output IT of INHRA has the following wage types generated.

Additional Information :

A) Configuration-

1. Define a code for housing type and associate a tax code to it. (V_T7INR7)
2. In view V_T7INR3, maintain percentage/amount for housing related constants.
3. In view V_T7INR9, maintain city category for housing types.
4. Tax codes for housing are SHRA, SCLA, SCOA & SHOT.

B) Wage types used for Housing :-

1. /114 -HRA Basis System generated cumulation wage type. HRA exemption is computed through the use of this wage type.
2. /115 -COA/CLA Basis It is formed as a difference of /124 Monthly regular income and /132 Monthly exemptions.
3. /3R9 -Diff:Rent & COA/CLA Elig . It is generated during the execution of function INHRA and determines the tax related
computations applicable
for the housing benefits availed by the employee.
4. /3RB -Perk value: housing
5. /3RC -Perk value:helpers/3RDPerk value: furniture
6. /4E4 -Annual HRA Exemption
7. /AHA -CF HRA Allowance
8. /ZHR -BF HRA Arrears
9. /ZR9 -CF Diff:Rent & COA/CLA Eligi.
10. /AR9 -CF Diff:Rent & COA/CLA Eligi.

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Calculation of Perk on Employer Contribution above limit of INR 7.5L as per Budget
2020-21

Purpose:
The purpose of this Support Content is to explain the new functionality where Employer Contributions like Employer PF,
Superannuation, Employer NPS etc. above a combined limit of INR 750,000 should be taxed as perks as per the changes
announced in Budget 2020-21.

Overview:
The explanation given here will cover all the wage types involved in the creation of the wage type /3PE which contains the amount
of Employer Contributions over the limit of INR 750,000.

Calculation of wage type /3FI:

1. In the function INEPF, the system checks the values of Employer PF contribution in the views V_T7INF3 and V_T7INF5. If
the value in the view V_T7INF5 is greater than the value in V_T7INF3, then it means that the employee is actually getting
some extra Employer PF contribution.

2. If the value of Employer Contribution in V_T7INF5 is greater than the one in the view V_T7INF3, then the higher percentage
value is effectively used for calculation of Employer PF contribution. This net extra PF contribution is calculated as follows,

Net Extra PF contribution = (Employer PF basis) * (Difference of values of Employer PF in V_T7INF5 and V_T7INF3 / 100)

This value is stored in the wage type /3FF. This value is effectively ZERO if the value of Employer PF contribution in
V_T7INF3 is equal to or greater than the one in V_T7INF5.

3. The current month's projected value of Extra PF contribution is now calculated. What this means is that if the employee
has been hired on, say, 5th May, then,

Current Month's Projection of Extra PF = Net Extra PF contribution / (Number of Active Days / Total number of days in the
month)

This ensures that we project the complete value of Extra PF contribution for the month in case of mid-month hires.
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4. Finally, the value of /3FI is calculated as,

/3FI = YTD of Net Extra PF contribution + Net Extra PF contribution of current month + (Current Month's Projection of
Extra PF * Projection factor)

Calculation of /3FR:
1. In the function INEPF, we calculate the total annual Employer PF contribution by projecting the value of Employer PF
contribution (/3F3) as per the Projection Factor,
Total Annual Employer PF contribution = YTD of Employer PF contribution + Current Month's value of Employer PF
contribution + (Current month's value of Employer PF contribution * Projection Factor)
2. Now, we calculate the total annual Employer Pension contribution by projecting the value of Employer Pension contribution
(/3F4) as per the Projection Factor,
Total Annual Employer Pension contribution = YTD of Employer Pension contribution + Current Month's value of Employer
Pension contribution + (Current month's value of Employer Pension contribution * Projection Factor)
3. Finally, the value of /3FR is calculated as,
/3FR = Total Annual Employer PF contribution + Total Annual Employer Pension contribution

Calculation of /3I6:
1. In the function INS88, we calculate the value of /144 as per Cumulation Class 44 settings of the applicable wage types.
This is the Monthly Employer NPS basis.
2. Next we calculate the Annualised Employer NPS basis as per the following formula,
Annualised Employer NPS basis = Employer NPS basis for Previous Employer + Monthly Employer NPS basis YTD +
Current month's Employer NPS basis + (Current month's Monthly Employer NPS basis * Projection factor)
3. Next we limit this Annualised Employer NPS basis as per the percentage maintained in the constant S80ER in the view
V_T511K. This limits the Employer basis as per the Income tax rules set up by the Income Tax Authority of India.
4. We then calculate the Monthly Employer NPS contribution as per the following formula,
Monthly Employer NPS contribution = Monthly Employer NPS basis * Employer NPS contribution percentage
This is also the value stored in the wage type /3FS.
5. Then we calculate the annualised value of Employer NPS contribution as per the following formula,
Annualised Employer NPS contribution = Monthly Employer NPS contribution YTD + Current month's Employer NPS
contribution + (Current month's Employer NPS contribution * Projection factor)
This is also the value stored in the wage type /3FT.
6. Finally, the minimum of Annualised Employer NPS basis(limited as per constant S80ER) and Annualised Employer NPS
contribution and that value is pushed into the wage types /3I6.

PCR ZSAN (or equivalent Z-PCR as Note 995880):

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As per the instructions in the Note 2918077, SAP has provided Payroll variable SAEN in which you can pass the total Annual
Employer Superannuation contribution. This variable can be used inside a customer specific PCR and this PCR should be placed in
subschema INN1 or (customer specific schema ZNN1) before INEXD function. You can pass the customer specific wage type which
has the Employer Annual Superannuation value to the payroll variable via the operation “ADDWT&SAEN”

This is demonstrated in the attachment titled "Perk above 7.5 lakhs configuration.pdf" which comes with the Note 2918077. In the
attachment, this is done in a Z-PCR called ZSAN, but the nomenclature of the PCR is upto the customer. The solution provided in
the Note 2918077 only mentions annual superannuation.

In case of monthly superannuation, you will need to have a custom rule written so that Monthly values stored in CRT (YTD) +
value of current month + Value of Current month projected for remaining months, can be accumulated to the annual value.
This annual value can then be passed to the payroll variable via the operation “ADDWT&SAEN”.

Function INEXD:
1. Finally, in the function INEXD, the value of /3PE is generated as follows,
Value of /3PE = [ (/3FR - /3FI) + /3I6 + value of wage type assigned to variable SAEN] - 750,000
2. Next, the value of /3PE is added into the perk wage type /127,
Value of /127 = Value of /127 + Value of /3PE

The case for variable ERPV:

The variable ERPV has been provided to adjust the contribution amount affected by INR 7.5L limit. Please consult the attachment
titled "Perk above 7.5 lakhs configuration.pdf" which comes with the Note 2918077 for further information. This is basically an
adjustment wage type and you should discuss its impact with your legal team before making use of it. Please read the manual
instructions and note text of the Note 2918077 completely before making use of this variable.

Calculation of Provident fund for an employee for mid-month joining leaving or

transfer scenarios
Disclaimer: "Image/data in this Support Content is from SAP internal systems, sample data, or demo systems. Any
resemblance to real data is purely coincidental."

Purpose:

The purpose of this Support Content is to understand the PY-IN topic which deals with the calculation of Provident fund in payroll
for a mid-month joining/leaving or transfer of an employee.

Overview:

To know more about this behavior, we must first review the necessary information, and then know how to reproduce it so that we
can understand the reason of it.

1. Obtaining the necessary information:

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For replicating the above scenario, let us take an example of an employee hired from 02.11.2015, and then check how the PF basis
amount gets calculated, and the PF contribution on such basis amount.

2. Reproducing the behavior:

Employee in this case is hired from 02.11.2015, with a basic salary of Rs.15600/- per month.

Here we will check how the Employee PF contribution amount will vary based on the settings as maintained in Infotype 0587. The
Basis for Contribution for provident contribution can be maintained as:-
A) PF basis
or
B) PF basis or Eligible pay, whichever is less.

3. Scenario A:

Here the Infotype 0587, the Basis for Contribution for provident is maintained as “PF basis”.

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Payroll now processed for the period 08.2015 i.e. November 2015.
INEPF output IT will have the following values:-

Conclusion

Proration in case of mid-month Joining or Termination will be applicable to PF eligible pay along with EPF basis.
PF basis prorated in this case will be Wagetype /3FA-PF basis for Ee contrib for Rs.15, 080.00 (Rs.15600/30*29),
and this amount will be used to have the employee PF contribution be calculated,
i.e. Rs.15, 080.00*12% = Rs.1, 810.00, Wagetype /3F1 - Ee PF contribution

4. Scenario B:

Here the Infotype 0587, the Basis for Contribution for provident is maintained as “PF basis or Eligible pay, whichever is less”.

Payroll now processed for the period 08.2015 i.e. November 2015.

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INEPF output IT will have the following values:-

Conclusion

Proration in case of mid-month Joining or Termination will be applicable to PF eligible pay along with EPF basis.
In this case, PF basis prorated will be Rs.15, 080.00 (Rs.15600/30*29), and the Eligible pay prorated will be Rs.14.500.00
(Rs.15000/30*29).
Since Infotype 0587 has the Basis for contribution maintained as “PF basis or Eligible pay, whichever is less”, Rs.14,500 will be
considered as the basis amount Wagetype /3FA-PF basis for Ee contrib, and this amount will be used to have the employee PF
contribution be calculated,
i.e. Rs.14.500*12% = Rs.1, 740.00, Wagetype /3F1 - Ee PF contribution

Note:-

Please note that proration in case of mid-month termination and joining will be applicable to PF eligible pay along with EPF basis.
This is the standard behaviour of the system. Only in Case of LOP, the Eligible Pay is not prorated.

The same logic also applied to the Pension basis also, which will get prorated in case of mid-month termination and joining of an
employee. If the pension basis is eligible pay which is maintained in T511P in the constant PFBAS and currently having the value as
Rs.6500 then, in the case of mid-month joining Rs. 6500 will get prorated for the number of days employee was in the trust.

If the customer doesn't want this pension basis to be prorated then a User Exit: Override Employer Pension Basis has been
provided in payroll function INEPF. The name of the exit is EXIT_HINCALC0_002. This exit is in the enhancement HRINCEPF.
We request you to go through the documentation of this user exit at Payroll India > Statutory Social Contribution > Provident
Fund > User Exit: Override Employer Pension Basis.

Calculation of Tax on Income from Other Sources

Purpose:

The purpose of this Support Content is to explain how Tax calculation on Income from Other Sources is distinct from Income Tax
calculated on Normal Income, along with how the rate of tax differs for different sources of Income as entered in Infotype 584's
subtype 0002. There is no real focus on subtype 0001 as it is used mostly for deduction under Section 24 or for Company
Housing Loan.

Overview:

Now, before creating a scenario which can be used for explanation, one particular note needs to be discussed as it changed the
behaviour of Tax Credit w.r.t. Income from Other Sources. This particular note is 2133871 which delivered the constant TXCII which
makes sure that Tax Credit under Section 87A is only provided if the Total Income including any income from other sources is
under the pertinent slab for providing Tax Credit. Before this constant was delivered, Income from Other Sources was not

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considered for calculation of Tax Credit. As per SAP recommendation, from the Financial Year 2015, i.e., 01.04.2015 onward, the
value of this constant should be "1" in the view V_T511K. For our own example, the value of this constant is kept as "1" as can be
seen from the screenshot below:

1. Creating a scenario:

Now, the focus of this Support Content is on Infotype 0584 - subtype 0002 and therefore, we enter the values as shown in
the screenshot below:

As can be seen, the entries are made only for Long Term Capital Gains (Normal and Special Rate), Short Term Capital
Gains (Listed Securities) and Other Income (Unspecified). The others are left blank because as far as special rates of tax
are concerned, the aforementioned are the ones that cause maximum confusion as they're calculated separately from
normal income.

2. Understanding the calculation in INTAX:

The first thing to understand here is that there are special constants in the view V_T511K which deal with the income tax
rates for Income from Other Sources and they're shown in the screenshot below:

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As can be seen in the screenshot, the rates for Long Term Capital Gain (Normal Rate), Long Term Capital Gain (Special
Rate) and Other Income (unspecified) are 20%, 10% and 30% respectively. Similarly, the rate for Short Term Capital Gain
(Listed Securities) is 10% as shown below:

Now, moving onto the payroll log, the calculation of tax can be seen within the function INTAX as follows:

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The confusion regarding tax calculation arises mainly for two cases. The first one is shown above. Here, the Normal
Income is well below the taxable bracket of INR 250000 and as can be seen under Normal Income Tax, there is no income
tax for that income. However, this particular employee has a lot of income listed as "Income from Other Sources", so tax is
calculated as per the constants that were shown earlier.

Thus, as per LCNRT, Tax on Long Term Capital Gain (normal) is calculated on the amount that is pertinent for it. This
amount is derived as

Taxable Long Term Capital Gain (normal) = (Long Term Capital Gain income) - {Taxable Bracket - Normal Income} =
100000 - (250000 - 172050) = 22050

Now, the tax on Long Term Capital Gain (normal rate) becomes equal to this amount calculated multiplied by the
percentage value in LCNRT constant. Thus, we get,

Long Gain normal tax = 20% * (22050) = 4410

Moving on, for Long Term Capital Gain (special rate), the entire value entered in Infotype 0584 - subtype 0002 is multiplied
by percentage value in LCSRT. Thus, we get,

Long Gain special tax = 10% * (200000) = 20000

Again, for Short Term Capital Gain (Listed Securities), the entire value entered for it in Infotype 0584 - subtype 0002 is
multiplied by percentage value in SCGRT. Thus, we get,

Short gain Income tax = 10% * (5000) = 500

Finally, for Income from other sources (unspecified), the value entered for it in Infotype 0584 - subtype 0002 is multiplied
by the percentage value in OTHRT. Thus, we get,

Other income tax = 30% * (30000) = 9000

As can be seen from the screenshot where these values were highlighted and from the subsequent calculations that were
explained, the income tax for this particular employee is equal to INR 33910. This is despite the fact that this employee's
normal income falls under the taxable bracket. This is one of the cases where an employee who isn't paid enough to be in
taxable bracket should still be taxed if he/she has other sources of income.

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Moving on, there is one final doubt that needs to be clarified. Should this employee get Tax Credit under Section 87A?

As can be seen from this screenshot of the final RT, no Tax Credit is given to this employee. This is because the Total
Income of this employee which is calculated after including the income from other sources is over the limit of INR
500000.

Thus, the following two conclusions can be drawn:

(I) An employee can still be eligible to pay Income Tax even if the Gross Salary of this employee falls under the non-taxable
bracket.
(II) This same employee, depending upon the amount of the income he/she receives from other sources could also be
ineligible to receive tax credit.

Car And Conveyance COCS Employer Maintained 2 Cars 2 Drivers

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Disclaimer: "Image/data in this KBA is from SAP internal systems, sample data, or demo systems. Any resemblance to real data is purely coincidental."

Purpose

The purpose of this Support Content is to understand the PY-IN topic Car And Conveyance COCS Employer Maintained 2 Cars 2
Drivers i.e. how calculations happen ?.

Reproducing The Behavior

1. Hire an employee from say 01.04.2016 and maintain Infotype 0583 (Car & Conveyance) for this employee from this date as
shown below (here we have maintained COCS Employer Maintained Conveyance type). Enter Vehicle details (2 Cars, One
less than 1600 CC and other greater than 1600 CC) and select ‘Calc. Perk’ and enter number of drivers as 2 (example).

2. Infotype 0008 (Basic Pay) looks like as below

Calculations

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1. Execute Payroll for the month of April 2016 month i.e. period 01 2016

2. Check Payroll Log

3. Check INCCO function in payroll log

4. Check values of /3C1, /3C2.

Explanation

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As per the standard, the Car Perquisite is calculated based on the CC of the car and slab under which the rate falls. The first car
populates the perk value of Car 1 based on its CC and the second car populates perk Value of Car 2 10% of Actual Cost which is
maintained in view V_T511K (Transaction SM30)

Also, only one driver should be considered for calculation of perquisite. The expenses of any other drivers should totally be perked.

Now let is tale the example in the scenario given above:

/3C1 = For Car 1 Check V_T7INC5 + For Car 2 Check V_T511K

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Hence /3C1 = (1800 X 12 = 21600 ) + (10% of 80000 = 8000)

/3C1 = 21600 + 8000 = INR 29600 (Total) Ann car perk

Driver Perk from V_T511P view

Hence /3C2 Ann driver perk which is (900 X 12) = INR 10800 Total

/4E3 = 1600 X 12 = INR 19200

Related Content

Related Documents

Refer Support Content on Car & Conveyance &Car And Conveyance Perk from Act Expn OYCS wage type

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Related SAP Notes/KBAs

Car And Conveyance Perk from Act Expn OYCS wage type
Disclaimer: "Image/data in this KBA is from SAP internal systems, sample data, or demo systems. Any resemblance to real data is purely coincidental."

Purpose

The purpose of this Support Content is to understand the PY-IN topic Perk from Act Expn OYCS wage type (/3C5) i.e. how it is
calculated ?

Overview

To know more about this behavior, we must first review the necessary information, and then know how to reproduce it so that we
can understand the reason of it.

Reproducing The Behavior

1. Hire an employee from say 01.04.2016 and maintain Infotype 0583 (Car & Conveyance) for this employee from this date as
shown below (here we have maintained Availing OYCS Conveyance type). Enter Vehicle details and select ‘Calc. Perk’ and
enter number of drivers as 1 (example).

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2. Infotype 0015 (Additional Payments) overview where actual expenditure amount is paid for 2 months (example)

Calculations
1. Execute Payroll for April 2016 month i.e. Period 01 2016

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2. Check INCCO function in the log

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3. Check values of /3C5 and /3C1

4. Execute Payroll for May 2016 month i.e. period 02 2016

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5. Check INCCO in the payroll log

6. Check below the values of /3C5 and /3C1

Explanation
Perk from Act Expn OYCS wage type (/3C5)
This is the actual expenditure incurred by the employer for an Availing OYCS Car Scheme, reduced by the standard tax exempt
amount (stored in table view Perk Valuation for Cars (V_T7INC5)). The value of this wage type is calculated on a monthly basis.
The year-to-date value of this wage type is cumulated into Ann car perk wage type (/3C1).

FOR EXAMPLE: if the actual expenditure is 3600 in M222 wage type and from V_T7INC5 it take perk as 1800 and for driver if perk
is 900 , then /3C5 will be calculated as
/3C5 = 3600-1800-900 = 900 INR
Also The year-to-date value of this wage type is cumulated into Ann car perk wage type (/3C1)

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Related Content

Related Documents
SAP Help Website Link:
Perk from Act Expn OYCS wage type (/3C5)

Refer Support Content on Car & Conveyance

Related SAP Notes/KBAs

Car and Conveyance

Disclaimer: "Image/data in this KBA is from SAP internal systems, sample data, or demo systems. Any resemblance to real data is purely coincidental."

Purpose:

The purpose of this Support Content is to understand the PY-IN topic Car & Conveyance i.e. Exemption on Conveyance Allowance
& Perquisite on Car Schemes & Driver(s) provided by the company.

Overview:

To know more about this behavior, we must first review the necessary information, and then know how to reproduce it so that we
can understand the reason of it.

1. Obtaining the necessary information:

For replicating the above scenario, let us understand the basic concepts and configuration to set up the scenario.

All the configuration (and the view names) required for understanding the scenario, have been given below:

Define Conveyance Types

This is custom documentation. For more information, please visit the SAP Help Portal. 25
 12/5/24, 9:47 AM

Define Eligibility

Define Car Types

This is custom documentation. For more information, please visit the SAP Help Portal. 26
 12/5/24, 9:47 AM

Amount and Number of Cars eligibility

Open view V_T7INA3 and check the allowance grouping and then open view V_T7INC7 and check that allowance group should
exist in this view also.

Car type eligibility

This is custom documentation. For more information, please visit the SAP Help Portal. 27
 12/5/24, 9:47 AM

2. Reproducing the behavior:

Hire an employee from say 01.04.2015 and maintain Infotype 0583 (Car & Conveyance) for this employee from this date as shown
below (here we have maintained COCS Employer Maintained Conveyance type). Enter Vehicle details and select ‘Calc. Perk’ and
enter number of drivers as 1 (example)

This is custom documentation. For more information, please visit the SAP Help Portal. 28
 12/5/24, 9:47 AM
Pressing enter takes you to Infotype 0008 (Basic Pay) and dynamically defaults standard wage type M220 (Conveyance
allowance). We enter 3000 INR here (for example).

3. Calculations:

Run the April 2015 month’s payroll and check the log:

This is custom documentation. For more information, please visit the SAP Help Portal. 29
 12/5/24, 9:47 AM

4. Explanation:

Driver Perk is calculated based on constant DRVP1 (View V_T511P)

This is custom documentation. For more information, please visit the SAP Help Portal. 30
 12/5/24, 9:47 AM

/3C1 Annual Car Perk = 1800 X 12 = 21600

/3C2 Annual Driver Perk = 900 X 12 = 10800

/3C3 Conveyance Amount Monthly = 3000 (Check Infotype 0008)

/3C4 Conveyance monthly exemption = 1600 (Based on V_T7INT9 & V_T7INA9)

/4E3 Conveyance annual exemption = 1600 X 12 = 19200

(For more details : Read documentation of all the wage types shown above)

This is custom documentation. For more information, please visit the SAP Help Portal. 31
 12/5/24, 9:47 AM

Chapter VI - Section 80

Introduction :
Disclaimer: "Image/data in this KBA is from SAP internal systems, sample data, or demo systems. Any resemblance to real data is purely coincidental."

Chapter VI are getting calculated within the payroll function INS80 and INS88, located in schema IN00

Legality :

Chapter VI is getting calculated based on the Legal rule for Section 80 which is released by Indian Income tax. Legality as below

Deductions on Section 80C, 80CCC & 80CCD

Section 80C

The deduction under section 80C is allowed from your Gross Total Income. These are available to an Individual or a HUF. The
deduction is allowed for various investments, expenses and payments.

This is custom documentation. For more information, please visit the SAP Help Portal. 32
 12/5/24, 9:47 AM
Total Deduction under section 80C, 80CCC and 80CCD(1) together cannot exceed Rs 1,50,000 for the financial year 2014-15
(assessment year 2015-16). The limit for financial year 2015-16 is also Rs 1,50,000.

Section 80CCC: Deduction in respect of Premium Paid for Annuity Plan of LIC or Other Insurer

This section provides deduction to an Individual for any amount paid or deposited in any annuity plan of LIC or any other insurer
for receiving pension from a fund referred to in Section 10(23AAB).

In case the annuity is surrendered before the date of its maturity, the surrender value is taxable in the year of receipt.

Section 80CCD: Deduction in respect of Contribution to Pension Account

For FY 2014-15 (assessment year 2015-16)

Total Deduction under Section 80C, 80CCC and 80CCD(1) cannot exceed Rs 1,50,000.

For FY 2015-16 (assessment year 2016-17)

A new section 80CCD(1B) has been introduced to provide for additional deduction for amount contributed to NPS of up to Rs
50,000.

Therefore for financial year 2015-16, Total Deduction under Section 80C, 80CCC, 80CCD(1) and 80 CCD(1B) cannot exceed Rs
2,00,000.

From assessment year 2012-13, employer's contribution under section 80CCD(2) towards NPS is outside the monetary ceiling
mentioned above.

Deductions on Savings Bank Account

Section 80 TTA: Deduction from gross total income with respect to any Income by way of Interest on Savings account

Deduction from gross total income of an individual or HUF, up to a maximum of Rs. 10,000/-, in respect of interest on deposits in
savings account with a bank, co-operative society or post office. Section 80TTA deduction is not available on interest income from
fixed deposits.

Deductions on House Rent

Section 80GG: Deduction with respect to House Rent Paid

This deduction is available for rent paid when HRA is not received. Assessee or his spouse or minor child should not own
residential accommodation at the place of employment.
Assessee should not be in receipt of house rent allowance.
He should not have self occupied residential premises in any other place.

Deduction available is the least of

1. Rent paid minus 10% of total income

2. Rs. 2000/- per month

This is custom documentation. For more information, please visit the SAP Help Portal. 33
 12/5/24, 9:47 AM
3. 25% of total income

Deductions on Loan for Higher Studies

Section 80E: Deduction with respect to Interest on Loan for Higher Studies

Deduction in respect of interest on loan taken for pursuing higher education. This loan is taken for higher education for the
assessee, spouse or children or for a student for whom the assessee is a legal guardian.

Deduction for First Time Home Owners

Section 80EE: Deductions on Home Loan Interest for First Time Home Owners

This section provided deduction on the Home Loan Interest paid and is valid for financial years 2013-14 & 2014-15 (Assessment
year 2014-15 and 2015-16) only. The deduction under this section is available only to Individuals for first house purchased where
the value of the house is Rs 40lakhs or less and loan taken for the house is Rs 25lakhs or less. And the Loan has been sanctioned
between 01.04.2013 to 31.03.2014. The total deduction allowed under this section is Rs 1,00,000.

Deductions on Rajiv Gandhi Equity Saving Scheme (RGESS)

Section 80CCG: Rajiv Gandhi Equity Saving Scheme (RGESS)

The Rajiv Gandhi Equity Saving Scheme (RGESS) was launched after the 2012 Budget. Investors whose gross total income is less
than Rs. 12 lakhs can invest in this scheme. Upon fulfillment of conditions laid down in the section, the deduction is lower of - 50%
of amount invested in equity shares or Rs 25,000.

Deductions on Medical Insurance

Section 80D: Deduction in respect of Medical Insurance

For financial year 2014-15 - Deduction is available up to Rs. 15,000/- to an assessee for insurance of self, spouse and dependent
children. If individual or spouse is more than 60 years old the deduction available is Rs 20,000. An additional deduction for
insurance of parents (father or mother or both) is available to the extent of Rs. 15,000/- if less than 60 years old and Rs 20,000 if
parents are more than 60 years old. Therefore, the maximum deduction available under this section is to the extent of Rs.
40,000/-. (From AY 2013-14, within the existing limit a deduction of up to Rs. 5,000 for preventive health check-up is available).

For financial year 2015-16 – Deduction is raised from Rs 15,000 to Rs 25,000. The deduction for senior citizens is raised from Rs
20,000 to Rs 30,000. For uninsured super senior citizens (more than 80 years old) medical expenditure incurred up to Rs 30,000
shall be allowed as a deduction under section 80D. However, total deduction for health insurance premium and medical expenses
for parents shall be limited to Rs 30,000.

Deductions on Medical Expenditure for a Handicapped Relative

Section 80DD: Deduction in respect of Rehabilitation of Handicapped Dependent Relative

Deduction is available on:

1. expenditure incurred on medical treatment, (including nursing), training and rehabilitation of handicapped dependent relative

This is custom documentation. For more information, please visit the SAP Help Portal. 34
 12/5/24, 9:47 AM
2. Payment or deposit to specified scheme for maintenance of dependent handicapped relative.

Where disability is 40% or more but less than 80% - fixed deduction of Rs 50,000. Where there is severe disability (disability is
80% or more) – fixed deduction of Rs 1,00,000.A certificate of disability is required from prescribed medical authority.

Note: A person with 'severe disability' means a person with 80% or more of one or more disabilities as outlined in section 56(4) of
the 'Persons with disabilities (Equal opportunities, protection of rights and full participation)' Act.

For financial year 2015-16 – The deduction limit of Rs 50,000 has been raised to Rs 75,000 and Rs 1,00,000 has been raised to Rs
1,25,000.

Deductions on Medical Expenditure on Self or Dependent Relative

Section 80DDB: Deduction in respect of Medical Expenditure on Self or Dependent Relative

A deduction to the extent of Rs. 40,000/- or the amount actually paid, whichever is less is available for expenditure actually
incurred by resident assessee on himself or dependent relative for medical treatment of specified disease or ailment. The diseases
have been specified in Rule 11DD. A certificate in form 10 I is to be furnished by the assessee from any Registered Doctor.

In case of senior citizen the deduction can be claimed up to Rs 60,000 or amount actually paid, whichever is less.

For financial year 2015-16 – for very senior citizens Rs 80,000 is the maximum deduction that can be claimed.

Deductions on Person suffering from Physical Disability

Section 80U: Deduction with respect to Person suffering from Physical Disability

Deduction of Rs. 50,000/- to an individual who suffers from a physical disability (including blindness) or mental retardation.
Further, if the individual is a person with severe disability, deduction of Rs. 100,000/- shall be available u/s 80U. Certificate should
be obtained from a Govt. Doctor. The relevant rule is Rule 11D.

For financial year 2015-16 – The deduction limit of Rs 50,000 has been raised to Rs 75,000 and Rs 1,00,000 has been raised to Rs
1,25,000.

Deduction for donations towards Social Causes

Section 80G: Deduction for donations towards Social Causes

The various donations specified in Sec. 80G are eligible for deduction up to either 100% or 50% with or without restriction as
provided in Sec. 80G. 80G deduction not applicable in case donation is done in form of cash for amount over Rs 10,000.

Donations with 100% deduction without any qualifying limit:

National Defence Fund set up by the Central Government

Prime Minister's National Relief Fund
National Foundation for Communal Harmony
An approved university/educational institution of National eminence
Zila Saksharta Samiti constituted in any district under the chairmanship of the Collector of that district
Fund set up by a State Government for the medical relief to the poor
National Illness Assistance Fund
National Blood Transfusion Council or to any State Blood Transfusion Council
National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities
National Sports Fund
National Cultural Fund
Fund for Technology Development and Application
This is custom documentation. For more information, please visit the SAP Help Portal. 35
 12/5/24, 9:47 AM
National Children's Fund
Chief Minister's Relief Fund or Lieutenant Governor's Relief Fund with respect to any State or Union Territory
the Army Central Welfare Fund or the Indian Naval Benevolent Fund or the Air Force Central Welfare Fund, Andhra Pradesh
Chief Minister's Cyclone Relief Fund, 1996
The Maharashtra Chief Minister's Relief Fund during October 1, 1993 and October 6,1993
Chief Minister's Earthquake Relief Fund, Maharashtra
Any fund set up by the State Government of Gujarat exclusively for providing relief to the victims of earthquake in Gujarat
Any trust, institution or fund to which Section 80G(5C) applies for providing relief to the victims of earthquake in Gujarat
(contribution made during January 26, 2001 and September 30, 2001) or
Prime Minister's Armenia Earthquake Relief Fund
Africa (Public Contributions — India) Fund
Swachh Bharat Kosh (applicable from financial year 2014-15)
Clean Ganga Fund (applicable from financial year 2014-15)
National Fund for Control of Drug Abuse (applicable from financial year 2015-16)

Donations with 50% deduction without any qualifying limit.

Jawaharlal Nehru Memorial Fund

Prime Minister's Drought Relief Fund
Indira Gandhi Memorial Trust
The Rajiv Gandhi Foundation

Donations to the following are eligible for 100% deduction subject to 10% of adjusted gross total income

Government or any approved local authority, institution or association to be utilised for the purpose of promoting family
planning
Donation by a Company to the Indian Olympic Association or to any other notified association or institution established in
India for the development of infrastructure for sports and games in India or the sponsorship of sports and games in India.

Donations to the following are eligible for 50% deduction subject to 10% of adjusted gross total income

Any other fund or any institution which satisfies conditions mentioned in Section 80G(5)
Government or any local authority to be utilised for any charitable purpose other than the purpose of promoting family
planning
Any authority constituted in India for the purpose of dealing with and satisfying the need for housing accommodation or for
the purpose of planning, development or improvement of cities, towns, villages or both
Any corporation referred in Section 10(26BB) for promoting interest of minority community
For repairs or renovation of any notified temple, mosque, gurudwara, church or other place.

Deductions on Contribution by Companies to Political Parties

Section 80GGB: Deduction in respect of contributions given by companies to Political Parties

Deduction is allowed to an Indian company for amount contributed by it to any political party or an electoral trust. Deduction is
allowed for contribution done by any way other than cash.

Political party means any political party registered under section 29A of the Representation of the People Act. Contribution is
defined as per section 293A of the Companies Act, 1956.

Deductions on Contribution by Individuals to Political Parties

Section 80GGC: Deduction in respect of contributions given by any person to Political Parties

Deduction is allowed to an assessee for any amount contributed to any political party or an electoral trust. Deduction is allowed for
contribution done by any way other than cash.

Political party means any political party registered under section 29A of the Representation of the People Act.

This is custom documentation. For more information, please visit the SAP Help Portal. 36
 12/5/24, 9:47 AM
Deductions on Income by way of Royalty of a Patent

Section 80RRB: Deduction with respect to any Income by way of Royalty of a Patent

Deduction in respect of any income by way of royalty is respect of a patent registered on or after 01.04.2003 under the Patents Act
1970 shall be available up to Rs. 3 lacs or the income received, whichever is less. The assessee must be an individual resident of
India who is a patentee. The assessee must furnish a certificate in the prescribed form duly signed by the prescribed authority.

Configuration :

The above legality is maintained under the following tables

V_T7INI5 contains the list of Section 80, for this Sec 80 the Overall limits for each section is maintained in V_T7INI7 with validity
dates in 1-1 relationship, where Sub Sec number is the link between the tables

For Sec 80C the various Investments Details are maintained in V_T7INI2 and individual limits for Investment details under Sec 80c
is maintained in V_T7INI4 with validity dates in 1-1 relationship, where Invt Code number is the link between the tables

This is custom documentation. For more information, please visit the SAP Help Portal. 37
 12/5/24, 9:47 AM

For Sec 80 (Rest of 80C) various Sub Division is maintained in V_T7INI8 and individual limits for Sub Divn details under Sec 80 is
maintained in V_T7INI9 with validity dates in 1-1 relationship, where Sub Sec number and Division number is the link between the
tables

This is custom documentation. For more information, please visit the SAP Help Portal. 38
 12/5/24, 9:47 AM

Relevant Infotype :

Values will get picked up from Infotype 585, Infotype 586 and Infotype 587.

This is custom documentation. For more information, please visit the SAP Help Portal. 39
 12/5/24, 9:47 AM

During payroll Calculation the value from IT 587 Employee NPS contribution will be populated into technical Wage Type /3I5, which
is contribution made under Section 80CCD(1), the value from IT 587 Employer NPS contribution will be populated into technical
Wage type /3I6, which is contribution made under Section 80CCD.

This is custom documentation. For more information, please visit the SAP Help Portal. 40
 12/5/24, 9:47 AM

From Infotype 586, the values maintained will be populated into technical Wage type /3I2 which is 80C investment made by
employee, which include employee PF contribution from Wage type /3F6.

Technical Wage type /3I1 is the Chapter VI contribution which include value from /3I2 upto the permitted limit for the section as
per the legality plus(+) section 80 contribution maintained in IT 585 upto the permitted limit for the section as per the legality.
Later /3I1 will be populated into technical Wage type /432 during Income tax calculation.

The WT /3I2 value include PF amount from WT /3F6, section limit is applied based on legality and added up in WT /3I1 along with
other Section 80 value for Chapter VI deduction.

Copy of Chapter VI - Section 80

Introduction :

Chapter VI are getting calculated within the payroll function INS80 and INS88, located in schema IN00

This is custom documentation. For more information, please visit the SAP Help Portal. 41
 12/5/24, 9:47 AM

Legality :
Chapter VI is getting calculated based on the Legal rule for Section 80 which is released by Indian Income tax. Legality as below

Deductions on Section 80C, 80CCC & 80CCD

Section 80C

The deduction under section 80C is allowed from your Gross Total Income. These are available to an Individual or a HUF. The
deduction is allowed for various investments, expenses and payments.

Total Deduction under section 80C, 80CCC and 80CCD(1) together cannot exceed Rs 1,50,000 for the financial year 2014-15
(assessment year 2015-16). The limit for financial year 2015-16 is also Rs 1,50,000.

Section 80CCC: Deduction in respect of Premium Paid for Annuity Plan of LIC or Other Insurer

This section provides deduction to an Individual for any amount paid or deposited in any annuity plan of LIC or any other insurer
for receiving pension from a fund referred to in Section 10(23AAB).

This is custom documentation. For more information, please visit the SAP Help Portal. 42
 12/5/24, 9:47 AM
In case the annuity is surrendered before the date of its maturity, the surrender value is taxable in the year of receipt.

Section 80CCD: Deduction in respect of Contribution to Pension Account

For FY 2014-15 (assessment year 2015-16)

Total Deduction under Section 80C, 80CCC and 80CCD(1) cannot exceed Rs 1,50,000.

For FY 2015-16 (assessment year 2016-17)

A new section 80CCD(1B) has been introduced to provide for additional deduction for amount contributed to NPS of up to Rs
50,000.

Therefore for financial year 2015-16, Total Deduction under Section 80C, 80CCC, 80CCD(1) and 80 CCD(1B) cannot exceed Rs
2,00,000.

From assessment year 2012-13, employer's contribution under section 80CCD(2) towards NPS is outside the monetary ceiling
mentioned above.

Deductions on Savings Bank Account

Section 80 TTA: Deduction from gross total income with respect to any Income by way of Interest on Savings account

Deduction from gross total income of an individual or HUF, up to a maximum of Rs. 10,000/-, in respect of interest on deposits in
savings account with a bank, co-operative society or post office. Section 80TTA deduction is not available on interest income from
fixed deposits.

Deductions on House Rent

Section 80GG: Deduction with respect to House Rent Paid

This deduction is available for rent paid when HRA is not received. Assessee or his spouse or minor child should not own
residential accommodation at the place of employment.
Assessee should not be in receipt of house rent allowance.
He should not have self occupied residential premises in any other place.

Deduction available is the least of

1. Rent paid minus 10% of total income

2. Rs. 2000/- per month

3. 25% of total income

Deductions on Loan for Higher Studies

Section 80E: Deduction with respect to Interest on Loan for Higher Studies

This is custom documentation. For more information, please visit the SAP Help Portal. 43
 12/5/24, 9:47 AM
Deduction in respect of interest on loan taken for pursuing higher education. This loan is taken for higher education for the
assessee, spouse or children or for a student for whom the assessee is a legal guardian.

Deduction for First Time Home Owners

Section 80EE: Deductions on Home Loan Interest for First Time Home Owners

This section provided deduction on the Home Loan Interest paid and is valid for financial years 2013-14 & 2014-15 (Assessment
year 2014-15 and 2015-16) only. The deduction under this section is available only to Individuals for first house purchased where
the value of the house is Rs 40lakhs or less and loan taken for the house is Rs 25lakhs or less. And the Loan has been sanctioned
between 01.04.2013 to 31.03.2014. The total deduction allowed under this section is Rs 1,00,000.

Deductions on Rajiv Gandhi Equity Saving Scheme (RGESS)

Section 80CCG: Rajiv Gandhi Equity Saving Scheme (RGESS)

The Rajiv Gandhi Equity Saving Scheme (RGESS) was launched after the 2012 Budget. Investors whose gross total income is less
than Rs. 12 lakhs can invest in this scheme. Upon fulfillment of conditions laid down in the section, the deduction is lower of - 50%
of amount invested in equity shares or Rs 25,000.

Deductions on Medical Insurance

Section 80D: Deduction in respect of Medical Insurance

For financial year 2014-15 - Deduction is available up to Rs. 15,000/- to an assessee for insurance of self, spouse and dependent
children. If individual or spouse is more than 60 years old the deduction available is Rs 20,000. An additional deduction for
insurance of parents (father or mother or both) is available to the extent of Rs. 15,000/- if less than 60 years old and Rs 20,000 if
parents are more than 60 years old. Therefore, the maximum deduction available under this section is to the extent of Rs.
40,000/-. (From AY 2013-14, within the existing limit a deduction of up to Rs. 5,000 for preventive health check-up is available).

For financial year 2015-16 – Deduction is raised from Rs 15,000 to Rs 25,000. The deduction for senior citizens is raised from Rs
20,000 to Rs 30,000. For uninsured super senior citizens (more than 80 years old) medical expenditure incurred up to Rs 30,000
shall be allowed as a deduction under section 80D. However, total deduction for health insurance premium and medical expenses
for parents shall be limited to Rs 30,000.

Deductions on Medical Expenditure for a Handicapped Relative

Section 80DD: Deduction in respect of Rehabilitation of Handicapped Dependent Relative

Deduction is available on:

1. expenditure incurred on medical treatment, (including nursing), training and rehabilitation of handicapped dependent relative

2. Payment or deposit to specified scheme for maintenance of dependent handicapped relative.

Where disability is 40% or more but less than 80% - fixed deduction of Rs 50,000. Where there is severe disability (disability is
80% or more) – fixed deduction of Rs 1,00,000.A certificate of disability is required from prescribed medical authority.

Note: A person with 'severe disability' means a person with 80% or more of one or more disabilities as outlined in section 56(4) of
the 'Persons with disabilities (Equal opportunities, protection of rights and full participation)' Act.

This is custom documentation. For more information, please visit the SAP Help Portal. 44
 12/5/24, 9:47 AM
For financial year 2015-16 – The deduction limit of Rs 50,000 has been raised to Rs 75,000 and Rs 1,00,000 has been raised to Rs
1,25,000.

Deductions on Medical Expenditure on Self or Dependent Relative

Section 80DDB: Deduction in respect of Medical Expenditure on Self or Dependent Relative

A deduction to the extent of Rs. 40,000/- or the amount actually paid, whichever is less is available for expenditure actually
incurred by resident assessee on himself or dependent relative for medical treatment of specified disease or ailment. The diseases
have been specified in Rule 11DD. A certificate in form 10 I is to be furnished by the assessee from any Registered Doctor.

In case of senior citizen the deduction can be claimed up to Rs 60,000 or amount actually paid, whichever is less.

For financial year 2015-16 – for very senior citizens Rs 80,000 is the maximum deduction that can be claimed.

Deductions on Person suffering from Physical Disability

Section 80U: Deduction with respect to Person suffering from Physical Disability

Deduction of Rs. 50,000/- to an individual who suffers from a physical disability (including blindness) or mental retardation.
Further, if the individual is a person with severe disability, deduction of Rs. 100,000/- shall be available u/s 80U. Certificate should
be obtained from a Govt. Doctor. The relevant rule is Rule 11D.

For financial year 2015-16 – The deduction limit of Rs 50,000 has been raised to Rs 75,000 and Rs 1,00,000 has been raised to Rs
1,25,000.

Deduction for donations towards Social Causes

Section 80G: Deduction for donations towards Social Causes

The various donations specified in Sec. 80G are eligible for deduction up to either 100% or 50% with or without restriction as
provided in Sec. 80G. 80G deduction not applicable in case donation is done in form of cash for amount over Rs 10,000.

Donations with 100% deduction without any qualifying limit:

National Defence Fund set up by the Central Government

Prime Minister's National Relief Fund
National Foundation for Communal Harmony
An approved university/educational institution of National eminence
Zila Saksharta Samiti constituted in any district under the chairmanship of the Collector of that district
Fund set up by a State Government for the medical relief to the poor
National Illness Assistance Fund
National Blood Transfusion Council or to any State Blood Transfusion Council
National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities
National Sports Fund
National Cultural Fund
Fund for Technology Development and Application
National Children's Fund
Chief Minister's Relief Fund or Lieutenant Governor's Relief Fund with respect to any State or Union Territory
the Army Central Welfare Fund or the Indian Naval Benevolent Fund or the Air Force Central Welfare Fund, Andhra Pradesh
Chief Minister's Cyclone Relief Fund, 1996
The Maharashtra Chief Minister's Relief Fund during October 1, 1993 and October 6,1993
Chief Minister's Earthquake Relief Fund, Maharashtra
Any fund set up by the State Government of Gujarat exclusively for providing relief to the victims of earthquake in Gujarat
Any trust, institution or fund to which Section 80G(5C) applies for providing relief to the victims of earthquake in Gujarat
(contribution made during January 26, 2001 and September 30, 2001) or
Prime Minister's Armenia Earthquake Relief Fund
Africa (Public Contributions — India) Fund
This is custom documentation. For more information, please visit the SAP Help Portal. 45
 12/5/24, 9:47 AM
Swachh Bharat Kosh (applicable from financial year 2014-15)
Clean Ganga Fund (applicable from financial year 2014-15)
National Fund for Control of Drug Abuse (applicable from financial year 2015-16)

Donations with 50% deduction without any qualifying limit.

Jawaharlal Nehru Memorial Fund

Prime Minister's Drought Relief Fund
Indira Gandhi Memorial Trust
The Rajiv Gandhi Foundation

Donations to the following are eligible for 100% deduction subject to 10% of adjusted gross total income

Government or any approved local authority, institution or association to be utilised for the purpose of promoting family
planning
Donation by a Company to the Indian Olympic Association or to any other notified association or institution established in
India for the development of infrastructure for sports and games in India or the sponsorship of sports and games in India.

Donations to the following are eligible for 50% deduction subject to 10% of adjusted gross total income

Any other fund or any institution which satisfies conditions mentioned in Section 80G(5)
Government or any local authority to be utilised for any charitable purpose other than the purpose of promoting family
planning
Any authority constituted in India for the purpose of dealing with and satisfying the need for housing accommodation or for
the purpose of planning, development or improvement of cities, towns, villages or both
Any corporation referred in Section 10(26BB) for promoting interest of minority community
For repairs or renovation of any notified temple, mosque, gurudwara, church or other place.

Deductions on Contribution by Companies to Political Parties

Section 80GGB: Deduction in respect of contributions given by companies to Political Parties

Deduction is allowed to an Indian company for amount contributed by it to any political party or an electoral trust. Deduction is
allowed for contribution done by any way other than cash.

Political party means any political party registered under section 29A of the Representation of the People Act. Contribution is
defined as per section 293A of the Companies Act, 1956.

Deductions on Contribution by Individuals to Political Parties

Section 80GGC: Deduction in respect of contributions given by any person to Political Parties

Deduction is allowed to an assessee for any amount contributed to any political party or an electoral trust. Deduction is allowed for
contribution done by any way other than cash.

Political party means any political party registered under section 29A of the Representation of the People Act.

Deductions on Income by way of Royalty of a Patent

Section 80RRB: Deduction with respect to any Income by way of Royalty of a Patent

Deduction in respect of any income by way of royalty is respect of a patent registered on or after 01.04.2003 under the Patents Act
1970 shall be available up to Rs. 3 lacs or the income received, whichever is less. The assessee must be an individual resident of
India who is a patentee. The assessee must furnish a certificate in the prescribed form duly signed by the prescribed authority.

This is custom documentation. For more information, please visit the SAP Help Portal. 46
 12/5/24, 9:47 AM
“

Configuration :
The above legality is maintained under the following tables

V_T7INI5 contains the list of Section 80, for this Sec 80 the Overall limits for each section is maintained in V_T7INI7 with validity
dates in 1-1 relationship, where Sub Sec number is the link between the tables

For Sec 80C the various Investments Details are maintained in V_T7INI2 and individual limits for Investment details under Sec 80c
is maintained in V_T7INI4 with validity dates in 1-1 relationship, where Invt Code number is the link between the tables

This is custom documentation. For more information, please visit the SAP Help Portal. 47
 12/5/24, 9:47 AM

For Sec 80 (Rest of 80C) various Sub Division is maintained in V_T7INI8 and individual limits for Sub Divn details under Sec 80 is
maintained in V_T7INI9 with validity dates in 1-1 relationship, where Sub Sec number and Division number is the link between the
tables

This is custom documentation. For more information, please visit the SAP Help Portal. 48
 12/5/24, 9:47 AM

Relevant Infotype :

Values will get picked up from Infotype 585, Infotype 586 and Infotype 587.

This is custom documentation. For more information, please visit the SAP Help Portal. 49
 12/5/24, 9:47 AM

During payroll Calculation the value from IT 587 Employee NPS contribution will be populated into technical Wage Type /3I5, which
is contribution made under Section 80CCD(1), the value from IT 587 Employer NPS contribution will be populated into technical
Wage type /3I6, which is contribution made under Section 80CCD.

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From Infotype 586, the values maintained will be populated into technical Wage type /3I2 which is 80C investment made by
employee, which include employee PF contribution from Wage type /3F6.

Technical Wage type /3I1 is the Chapter VI contribution which include value from /3I2 upto the permitted limit for the section as
per the legality plus(+) section 80 contribution maintained in IT 585 upto the permitted limit for the section as per the legality.
Later /3I1 will be populated into technical Wage type /432 during Income tax calculation.

The WT /3I2 value include PF amount from WT /3F6, section limit is applied based on legality and added up in WT /3I1 along with
other Section 80 value for Chapter VI deduction.

Copy of Frequently Asked Questions (FAQ's) on Union Budget Changes 2016-17

Purpose:

The purpose of this Support Content is to answer the frequently asked questions on the Union Budget Changes 2016-17 in relation
to SAP note 2290356

Question 1
While applying SAP Note 2290356 and moving Transport request to Quality, System getting error with return code 8.
Further analysis of the error indicated that during the activation phase got the next errors:
Screen MP058700 2000: Generation error
Screen MP058700 3000: Generation error
Program HINCALC0, Include PCEPFIN0: Syntax error in line 001110
The data object 'EPF' does not have a component called 'INWRK'.
Answer:-
Customers who are on release SAPHR604, and have applied SAPK-60484INSAPHRCIN and/or less than SAPK-
60490INSAPHRCIN will get the above error.
Customers need to apply SAP note 2157216, i.e. apply the correction instructions after implementing manual Instructions attached
with the note, and then apply the Budget changes note 2290356 version 7.
Detailed solution is provided in KBA 2312372 - Screen MP058700 2000 could not be generated error

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Question 2
We are going to implement NPS in our HR payroll & Union Budget Changes 2016 also. Please suggest for the SP level in our current
system if we go for NPS only & Union Budget 2016 separately?
Answer:-
1. NPS only - If you only wish to get the latest NPS changes then kindly check the pre-requisite HRSP levels for SAP HR 600 and
SAPHR 604 detailed in SAP note 2168787. Kindly have the same applied first, and then apply the SAP note 2168787 Version 7.
2. Budget 2016 - For Budget 2016, you will need to upgrade your system SP level as per Pre-requisite Support Pack Level
mentioned in SAP note 2290356 , then implement the pre-requisite Note 2157216 and then finally you will have to implement the
Note 2290356.
Please note that if you opt to go for Budget 2016 Note 2290356 implementation, you can ignore the NPS note 2168787 because
having applied the prerequisite HRSP level of the Budget note 2290356 will take care of the NPS changes automatically.

Question 3
What is the SAP note for Budget changes/tax changes 2016-17? How to enable income tax functionality 2016-17 in SAP R/3?
Answer:-
SAP note for the Budget changes is 2290356 version 7.

Question 4
In relation to budget note 0002287721 -Union Budget 2016-17 following are the two queries:-
a) EPS for new joinees:
Is this point or amendment applicable for all employers? If NOT, then how do we proceed with this SNOTE implementation? Is
there a separate note for employers for whom this amendment is not applicable?
b) Superannuation Fund:
Since the amendment is not yet passed with this Union Budget latest release, please suggest if we can still implement SNOTE -
2290356 completely?
Answer:-
a) This change is controlled through Info type 0587 by a check box. So in case you do not want to provide this for employees at
your organization, you may choose not to check this check box. However, as far as the code changes and manual changes are
concerned, you would need to implement the same through SAP Note: 2290356 (Union Budget Changes - 2016). Even when you
upgrade the HRSP you would get all the objects and code changes in your system. However you still can control it through IT0587
checkbox.
b) This change is totally a customer specific solution and you may choose to make changes as per your requirement. You may refer
to SAP Note: 2290356 (Union Budget Changes - 2016) 'Solution' section Point 7 for further details.

Question 5
While trying to apply the manual changes of Budget note 2290356, we are unable to proceed with Manual Step configuration,
because in Table T512W wage type /AF4 and /ZF4 are not available? How can we get these wage types?
Answer:-
Refer the solution detailed in KBA 2310652 - Technical wage types /AF4 and /ZF4 do not exist in system

Question 6
While trying to change the PCR’s/Standard rules as per the manual changes for applying budget note 2290356, getting the
message “you have only display authorization/authorization”? We are unable to change/edit the standard rule? System is not
allowing access to standard rule?
Answer:-
As per manual changes document of the budget note 2290356, following is mentioned:
Note:
Option 1
(i) Make the below mentioned changes in your respective existing customer specific rules
Option 2
(ii) In case you do not have any corresponding customer specific rules yet, create the same with the standard rules as reference:
a) In case you are making complete copy of the standard rules and then making the below mentioned modifications to the new
customer specific rules, you need to comment the standard rules in your schema and maintain your new rule there

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b) In case you are creating new customer specific rules only for ‘/3FK’ wage type, you need to have both standard and customer
specific rules in your schema. Place your new customer specific rules in the schema after the corresponding standard rules

Question 7
While carrying out the manual instructions as per SAP Note 2290356, Union Budget Changes 2016 for the House Loan Interest
Deduction U/S 80EE with 50,000/-, the start date and end date is maintained as 01.04.16 to 31.03.17 for infotypes 0585.As per
Income Tax Act the additional deduction of Interest can be claimed for any number of years.
May please guide us the significance of the Start Date and End date falling with the FY 16-17?
Answer:-
The interest under section 80EE is being updated as part of info type 0585 deduction.
Therefore the employee would need to have it claimed each of the financial year, based on the actual amount or the limit,
whichever is less.
This is the reason why the start date and end date are maintained.

Question 8
While trying to maintain the info type 0585, from 01.04.2016, getting the error “No. of entries in table exceeds 30"
Answer:-
Refer the solution detailed in KBA 2324636 - Error: No. of Entries in table exceeds 30 while creating info type 585 Section 80
Deductions

Question 9
We would like to apply SAP note 2290356-Union Budget changes manually, as we are unable to apply the prerequisite HRSP as
mentioned in the note. We are currently at a lower hrsp, and would apply the prerequisite HRSP in a couple of months’ time.
Can you please suggest/advise if we can apply the Budget changes manually? Is there are manual workaround to apply the budget
changes?
Answer:-
Applying the prerequisite HRSP is a mandatory requirement before applying the budget changes.
Manually applying the code changes is not advisable.

Question 10
our current EA-HR 600 hrsp level is 89, i.e. SAPK-60089INEAHRCIN Sub component EA-HRCIN of EA-HR". Will it be sufficient to
get union budget changes updated, or we need to update this patch, and if needed till we need to update.
Answer:-
Budget changes SAP note 2290356 does not mention about EA-HR 600 SP.The SAP note is applicable from EA-HR 604 onwards
i.e. if you are using the portal ESS applications , then you must be on EA-HR 604 or above (and not relevant for lower EA-HR
releases like EA-HR 600 in your case).
You will only need to ensure that the SAP HR 600 prerequisite support pack requirement is met, and then you can implement the
budget note 2016 i.e. sap note 2290356.

Question 11
With regard to note - 2290356 upgrading of the HRSP, our basis team is unable to find the support pack level as detailed in the
note. Getting the message: SAPK-600XXINSAPHRCIN not found, in service market place or the support Launchpad.
Answer:-
Kindly refer KBA 2322348 - Cannot find Support Package for Payroll India Example - SAPK-XXXYYINSAPHRCIN where XXX is the
release and YY is the SP level.

Question 12
How to track and confirm the PF number of newly joining employee, as per the budget changes note 2290356?
Answer:-
The PF number of newly joined employee will be from the date the employee joined the EPFO and not the employer. The employer
should decide if the employee is a new joinee or not.

Question 13
I am trying to implement SAP Note- 2290356. However I get the message: Implement Status as Cannot be implemented.
Answer:-
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The above error will be received in case the prerequisite HRSP as mentioned in the budget note is not applied for the SAP HR and
EA HR release as applicable. Customers need to first check that the prerequisite/minimum HRSP has been applied, and then apply
the code changes of the budget note.

Question 14
Just want to know on what basis legal changes will be implemented in SAP? Does SAP get any notification from Govt of India?
What is the process followed?
Answer:-
SAP receives all the legal changes from different channels as well as our legal counsel. We only release a change after confirmation
from our legal team.

Question 15
As per SAP Note 2290356 - Union Budget Changes for F.Y. 2016-2017,we would require clarification on the below mentioned points
1) Employer PF contribution for old employees who have not completed 3 years?
2) Employee newly joined in company but having PF registration more than 3 years old?
3) Eligibility of Employer contribution by Govt. of India, if income less than 15000 a month. Is it the gross or basic salary of
employee?
Answer:-
1) The change is applicable only for the new joinee’s and not for the existing ones.
2) New employees refers to employees who've newly joined EPFO and not the organization itself. So, if the employee has already
been a member of EPFO for over 3 years, then he's not eligible for this provision.
3) This is the monthly salary, as stated in the Budget 2016 announcement.

Question 16
System is asking for Access Key while trying to carry out the manual changes for the Budget note 2290356.Please Clarify how
should we go ahead so that system does not ask for access Key?
Answer:-
Whenever a change is made to the standard system you need to obtain an access key by registering at the Service Marketplace.
Kindly do the registration to obtain the access key so that the changes can be done in your system.
kindly CHECK sap note 86161 , for details.

Question 17
Refer point number 6 of the budget note i.e. Income from Dividends
Dividend in excess of INR 10 lakh per annum will be taxed at the rate of 10%. For example, if the dividend is INR 12 lakh, INR 2 lakh
will be taxed at 10%.
The expectation is that INR 10 lakh is also taxable aside from the dividend which is INR 2 lakh, per example in the note. Can you
confirm if the only taxable amount is the excess and/or dividend?
Answer:-
The amount of dividend exceeding Rs.10lacs , an additional tax of 10% is what will be applicable from the Individual income.This is
what the BUDGET CHANGES 2016 has introduced!
example:-For a dividend income of Rs.12lacs, the amount above rs.10 lacs, i.e. Rs.2lacs only will be taxed at 10%

Question 18
Refer point number 8of the budget note i.e. Employer Contribution of Provident Fund
The employer’s contribution to Provident fund in excess of 12% of the employee’s salary or INR 1,50,000 per annum will be subject
to tax.
NOTE: For the above mentioned Point No. 8, the change proposed is still under consideration by Govt. Hence, once the same is
passed in parliament a note will be released separately.
When will SAP note be released for the above legal change?
Answer:-
The above legal change point number 8 is abolished. Kindly refer 2334893 - Budget changes 2016 -Tax on employer contribution to
PF in excess of Rs.1.5 lacs WITHDRAWN, which details the same.

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Due to Retro Salary increase how WT /551, /552 and /553 are calculated
Introduction

Disclaimer: "Image/data in this KBA is from SAP internal systems, sample data, or demo systems. Any resemblance to real
data is purely coincidental."

This Support Content document explains in case of Retro increase in salary after payroll is executed, how it is handled in WT
/551, /552 and /553 in Payroll Calculation method for the current financial year.

Scenario :
Consider payroll is run for employee for pay period 01 2016 with salary as 50,000

Payroll Results calculated for this salary is

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Salary is increased retroactively from 50,000 to 60,000 from 01-Apr-2016 after executing Pay Period 01 2016

Because of the retro increase, Bank Transfer amount /559 can’t be changed for Pay period 01 2016, the difference amount is
updated in WT /551 and /553 and brought forward to current pay period 02 2016 as /552 and paid in pay period 02 2016.

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After running the pay period 02 2016, Salary of the employee is once again increased retroactively from 60,000 to 65,000
from 01.04.2016

Because of the retro increase, Bank Transfer amount /559 can’t be changed for Pay period 01 2016 and 02 2016, the difference
amount is updated in WT /551 and /553 and brought forward to current pay period 03 2016 as /552 and paid in pay period 03
2016.

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ESI - Salary Changed Retrospectively: Positive Arrears

"Image/data in this Support Content is from SAP internal systems, sample data, or demo systems. Any resemblance to real data is
purely coincidental."

Purpose
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The purpose of this Support Content is to understand the scenario how ESI is calculated in case of retrospective salary change of
an employee.

Overview
Use

This Employees' State Insurance (ESI) calculation happens in the INESI function in the payroll. Here we will see if the salary is
changed retrospectively, how system is going to calculate the ESI in case of positive arrears,

Prerequisites

Payroll results for the employee must exist for at least one period.

Required Configuration
All the configuration for deduction of ESI already present properly in the system. Refer KBA No. 2458961 - New ESI areas need to
be set up with different contribution percentages.

Reproducing the Behavior

Running the Payroll of newly hired employee

Hire an employee say from 01.04.2018 and maintain the salary of this employee e.g. 15000 INR per month as shown:

Maintain infotype 588 Subtype 0001 for this employee from 01.04.2018 so that ESI should start deducting from April 2018 payroll run.

Run the payroll of employee in live mode and check the payroll log as per below

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Changing the salary of the employee (retrospectively) and see the changes in next month's payroll run

Change the salary of employee to 18000 INR (from 15000 INR earlier) in infotype 0008 (Basic Pay) with effect from 01.04.2018

Run the payroll of employee / PERNR for May 2018 month i.e. period 2.
Retro will trigger.
Check Payroll Log as per below:

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First check Period 1 2018 run in 2 2018

In this go to Retroactive accounting INDIA and search for PDT IN54 (can be custom rule in customer system)

Check if difference ot 18000 - 15000 = 3000 INR is present in /AEA wage type.
Now check the next result i.e. Period 2 2018 run in 2 2018
Find INESI function in this period

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Here, /AEA wage type will be passed as /ZEA wage type which is added to /3EA to form ESI basis and accordingly ESI is deducted
on the total ESI basis (as per standard system)
Hence 1.75% of 21000 INR will be 368 INR (rounded off) as /3E1
and
4.75% of 21000 INR will be 998 INR (rounded off) as /3E2
(values as per the configuration in the ESI relevant views).

Result
Refer KBA No. 2312741 - ESI computation on negative arrears

Additional / Relevant Information

See Also

KBA No. 2312705 - ESIC Deduction Issue

KBA No. 2386101 - ESI not calculated for separated employee

Employee Provident fund contribution –rounding on arrears

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Disclaimer: "Image/data in this Support Content is from SAP internal systems, sample data, or demo systems. Any
resemblance to real data is purely coincidental."

Purpose:

The purpose of this Support Content is to understand the PY-IN topic which deals with the Employee Provident fund contribution –
rounding on arrears

Overview:

To know more about this behavior, we must first review the necessary information, and then know how to reproduce it so that we
can understand the reason of it.

1. Obtaining the necessary information:

For replicating the above scenario, let us take an example of an employee hired from 01.04.2015, with a Basic Salary of Rs.
12,535.00, payroll processed until June 2015. In July 2015, the salary of the employee is increased to Rs. 13,789.00 retrospectively
from April 2015. We will execute the payroll for July 2015,and check how the Employee PF contribution is calculated applying the
rounding to the nearest rupee for the arrears amounts so paid.

2. Reproducing the behavior:

Employee in this case is hired from 01.04.2015, with a basic salary of Rs. 12,535/- per month, and Payroll is processed until
June2015 payroll.

INEPF output IT will have the following values as of June 2015 Payroll

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In July 2015, the salary of the employee is increased to Rs. 13,789.00 retrospectively from April 2015.

Payroll when processed for July 2015, will retro from April 2015.

Conclusion
PF follows the deduction carry forward method so the difference between the deduction will be carry forwarded and rounding off
for PF is to the nearest rupee.

A) The rounding of PF arrear amount will be calculated as per the standard logic as follows:-

/3FA (April in April) = Rs. 12,535.00

/3F1 (April in April) = 12% of /3FA = Rs.1504.20 = Rs.1504 (rounding to nearest)

/3FA (April in July) = Rs.13, 789.00

/3F1 (April in October) = 12% of /3FA = Rs.1654.68 = Rs.1655 (rounding to nearest)

So the difference = Rs.1655-Rs.1504 = Rs.151, which will be the value as available in the payroll cluster, as the deduction
carried forward, in wage type /zf5.

Therefore similar calculation will take place for May and June periods in July 2015.
Therefore the /zf5 value will be Rs.151*3 = Rs.453.00.

B) The PF rounding will not happen on the Pf contribution done on the arrear basis amount,
i.e. Rs.13, 789.00 –Rs.12535.00 = Rs.1254*3 =Rs.3762.00

Pf Contribution = 12% on Rs.3762.00 = Rs.451.44 (Rounded to the nearest Rupee Rs.451.00)

We can see there is a difference between the two calculations, and the Calculations done as per A is the standard process
followed.

Form 16 - New Format

Introduction :

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 12/5/24, 9:47 AM

Disclaimer: "Image/data in this KBA is from SAP internal systems, sample data, or demo systems. Any resemblance to real
data is purely coincidental."

This Support Content document will explain you from which Wage type values are picked up and shown in Form 16 report.

In the below screen shot, the explanation given in Red colour is to explain which column value from Downloaded EFile of Form 24Q
is displayed and the explanation given in Blue colour is to explain which WT value is displayed. Kindly refer the Support Content
document on Form 24Q - E filing Format for better understanding Form 24Q column no.

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Form 16 - Old Format (Before 2017)

Introduction :

Disclaimer: "Image/data in this KBA is from SAP internal systems, sample data, or demo systems. Any resemblance to real
data is purely coincidental."

This Support Content document will explain you from which Wage type values are picked up and shown in Form 16 report

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Frequently Asked Questions (FAQ's) on Union Budget Changes 2016-17

Purpose:

The purpose of this Support Content is to answer the frequently asked questions on the Union Budget Changes 2016-17 in relation
to SAP note 2290356

Question 1
While applying SAP Note 2290356 and moving Transport request to Quality, System getting error with return code 8.
Further analysis of the error indicated that during the activation phase got the next errors:
Screen MP058700 2000: Generation error
Screen MP058700 3000: Generation error
Program HINCALC0, Include PCEPFIN0: Syntax error in line 001110

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The data object 'EPF' does not have a component called 'INWRK'.
Answer:-
Customers who are on release SAPHR604, and have applied SAPK-60484INSAPHRCIN and/or less than SAPK-
60490INSAPHRCIN will get the above error.
Customers need to apply SAP note 2157216, i.e. apply the correction instructions after implementing manual Instructions attached
with the note, and then apply the Budget changes note 2290356 version 7.
Detailed solution is provided in KBA 2312372 - Screen MP058700 2000 could not be generated error

Question 2
We are going to implement NPS in our HR payroll & Union Budget Changes 2016 also. Please suggest for the SP level in our current
system if we go for NPS only & Union Budget 2016 separately?
Answer:-
1. NPS only - If you only wish to get the latest NPS changes then kindly check the pre-requisite HRSP levels for SAP HR 600 and
SAPHR 604 detailed in SAP note 2168787. Kindly have the same applied first, and then apply the SAP note 2168787 Version 7.
2. Budget 2016 - For Budget 2016, you will need to upgrade your system SP level as per Pre-requisite Support Pack Level
mentioned in SAP note 2290356 , then implement the pre-requisite Note 2157216 and then finally you will have to implement the
Note 2290356.
Please note that if you opt to go for Budget 2016 Note 2290356 implementation, you can ignore the NPS note 2168787 because
having applied the prerequisite HRSP level of the Budget note 2290356 will take care of the NPS changes automatically.

Question 3
What is the SAP note for Budget changes/tax changes 2016-17? How to enable income tax functionality 2016-17 in SAP R/3?
Answer:-
SAP note for the Budget changes is 2290356 version 7.

Question 4
In relation to budget note 0002287721 -Union Budget 2016-17 following are the two queries:-
a) EPS for new joinees:
Is this point or amendment applicable for all employers? If NOT, then how do we proceed with this SNOTE implementation? Is
there a separate note for employers for whom this amendment is not applicable?
b) Superannuation Fund:
Since the amendment is not yet passed with this Union Budget latest release, please suggest if we can still implement SNOTE -
2290356 completely?
Answer:-
a) This change is controlled through Info type 0587 by a check box. So in case you do not want to provide this for employees at
your organization, you may choose not to check this check box. However, as far as the code changes and manual changes are
concerned, you would need to implement the same through SAP Note: 2290356 (Union Budget Changes - 2016). Even when you
upgrade the HRSP you would get all the objects and code changes in your system. However you still can control it through IT0587
checkbox.
b) This change is totally a customer specific solution and you may choose to make changes as per your requirement. You may refer
to SAP Note: 2290356 (Union Budget Changes - 2016) 'Solution' section Point 7 for further details.

Question 5
While trying to apply the manual changes of Budget note 2290356, we are unable to proceed with Manual Step configuration,
because in Table T512W wage type /AF4 and /ZF4 are not available? How can we get these wage types?
Answer:-
Refer the solution detailed in KBA 2310652 - Technical wage types /AF4 and /ZF4 do not exist in system

Question 6
While trying to change the PCR’s/Standard rules as per the manual changes for applying budget note 2290356, getting the
message “you have only display authorization/authorization”? We are unable to change/edit the standard rule? System is not
allowing access to standard rule?
Answer:-
As per manual changes document of the budget note 2290356, following is mentioned:

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 12/5/24, 9:47 AM
Note:
Option 1
(i) Make the below mentioned changes in your respective existing customer specific rules
Option 2
(ii) In case you do not have any corresponding customer specific rules yet, create the same with the standard rules as reference:
a) In case you are making complete copy of the standard rules and then making the below mentioned modifications to the new
customer specific rules, you need to comment the standard rules in your schema and maintain your new rule there
b) In case you are creating new customer specific rules only for ‘/3FK’ wage type, you need to have both standard and customer
specific rules in your schema. Place your new customer specific rules in the schema after the corresponding standard rules

Question 7
While carrying out the manual instructions as per SAP Note 2290356, Union Budget Changes 2016 for the House Loan Interest
Deduction U/S 80EE with 50,000/-, the start date and end date is maintained as 01.04.16 to 31.03.17 for infotypes 0585.As per
Income Tax Act the additional deduction of Interest can be claimed for any number of years.
May please guide us the significance of the Start Date and End date falling with the FY 16-17?
Answer:-
The interest under section 80EE is being updated as part of info type 0585 deduction.
Therefore the employee would need to have it claimed each of the financial year, based on the actual amount or the limit,
whichever is less.
This is the reason why the start date and end date are maintained.

Question 8
While trying to maintain the info type 0585, from 01.04.2016, getting the error “No. of entries in table exceeds 30"
Answer:-
Refer the solution detailed in KBA 2324636 - Error: No. of Entries in table exceeds 30 while creating info type 585 Section 80
Deductions

Question 9
We would like to apply SAP note 2290356-Union Budget changes manually, as we are unable to apply the prerequisite HRSP as
mentioned in the note. We are currently at a lower hrsp, and would apply the prerequisite HRSP in a couple of months’ time.
Can you please suggest/advise if we can apply the Budget changes manually? Is there are manual workaround to apply the budget
changes?
Answer:-
Applying the prerequisite HRSP is a mandatory requirement before applying the budget changes.
Manually applying the code changes is not advisable.

Question 10
our current EA-HR 600 hrsp level is 89, i.e. SAPK-60089INEAHRCIN Sub component EA-HRCIN of EA-HR". Will it be sufficient to
get union budget changes updated, or we need to update this patch, and if needed till we need to update.
Answer:-
Budget changes SAP note 2290356 does not mention about EA-HR 600 SP.The SAP note is applicable from EA-HR 604 onwards
i.e. if you are using the portal ESS applications , then you must be on EA-HR 604 or above (and not relevant for lower EA-HR
releases like EA-HR 600 in your case).
You will only need to ensure that the SAP HR 600 prerequisite support pack requirement is met, and then you can implement the
budget note 2016 i.e. sap note 2290356.

Question 11
With regard to note - 2290356 upgrading of the HRSP, our basis team is unable to find the support pack level as detailed in the
note. Getting the message: SAPK-600XXINSAPHRCIN not found, in service market place or the support Launchpad.
Answer:-
Kindly refer KBA 2322348 - Cannot find Support Package for Payroll India Example - SAPK-XXXYYINSAPHRCIN where XXX is the
release and YY is the SP level.

Question 12

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How to track and confirm the PF number of newly joining employee, as per the budget changes note 2290356?
Answer:-
The PF number of newly joined employee will be from the date the employee joined the EPFO and not the employer. The employer
should decide if the employee is a new joinee or not.

Question 13
I am trying to implement SAP Note- 2290356. However I get the message: Implement Status as Cannot be implemented.
Answer:-
The above error will be received in case the prerequisite HRSP as mentioned in the budget note is not applied for the SAP HR and
EA HR release as applicable. Customers need to first check that the prerequisite/minimum HRSP has been applied, and then apply
the code changes of the budget note.

Question 14
Just want to know on what basis legal changes will be implemented in SAP? Does SAP get any notification from Govt of India?
What is the process followed?
Answer:-
SAP receives all the legal changes from different channels as well as our legal counsel. We only release a change after confirmation
from our legal team.

Question 15
As per SAP Note 2290356 - Union Budget Changes for F.Y. 2016-2017,we would require clarification on the below mentioned points
1) Employer PF contribution for old employees who have not completed 3 years?
2) Employee newly joined in company but having PF registration more than 3 years old?
3) Eligibility of Employer contribution by Govt. of India, if income less than 15000 a month. Is it the gross or basic salary of
employee?
Answer:-
1) The change is applicable only for the new joinee’s and not for the existing ones.
2) New employees refers to employees who've newly joined EPFO and not the organization itself. So, if the employee has already
been a member of EPFO for over 3 years, then he's not eligible for this provision.
3) This is the monthly salary, as stated in the Budget 2016 announcement.

Question 16
System is asking for Access Key while trying to carry out the manual changes for the Budget note 2290356.Please Clarify how
should we go ahead so that system does not ask for access Key?
Answer:-
Whenever a change is made to the standard system you need to obtain an access key by registering at the Service Marketplace.
Kindly do the registration to obtain the access key so that the changes can be done in your system.
kindly CHECK sap note 86161 , for details.

Question 17
Refer point number 6 of the budget note i.e. Income from Dividends
Dividend in excess of INR 10 lakh per annum will be taxed at the rate of 10%. For example, if the dividend is INR 12 lakh, INR 2 lakh
will be taxed at 10%.
The expectation is that INR 10 lakh is also taxable aside from the dividend which is INR 2 lakh, per example in the note. Can you
confirm if the only taxable amount is the excess and/or dividend?
Answer:-
The amount of dividend exceeding Rs.10lacs , an additional tax of 10% is what will be applicable from the Individual income.This is
what the BUDGET CHANGES 2016 has introduced!
example:-For a dividend income of Rs.12lacs, the amount above rs.10 lacs, i.e. Rs.2lacs only will be taxed at 10%

Question 18
Refer point number 8of the budget note i.e. Employer Contribution of Provident Fund
The employer’s contribution to Provident fund in excess of 12% of the employee’s salary or INR 1,50,000 per annum will be subject
to tax.
NOTE: For the above mentioned Point No. 8, the change proposed is still under consideration by Govt. Hence, once the same is
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passed in parliament a note will be released separately.
When will SAP note be released for the above legal change?
Answer:-
The above legal change point number 8 is abolished. Kindly refer 2334893 - Budget changes 2016 -Tax on employer contribution to
PF in excess of Rs.1.5 lacs WITHDRAWN, which details the same.

HRA calculation - Difference between INMHR and INHRA

Purpose:
The purpose of this Support Content is to show that there can be differences between the values of HRA exemption calculated as
per the older logic of Annual HRA (used in INHRA) and the new logic of Monthly HRA (used in INMHR), especially when there are
master data changes in the middle of the financial year.

Overview:

The explanation given here will cover Actual Projection Method (constant SLPRJ in the view V_T511K is set to '0'), however, the
difference in calculation can also be observed if you're using Nominal Projection.

Master Data for first period:

Here, we'll see the master data values for the first period of the financial year of the employee. First up, we'll see the Rent value
that's saved in IT0581.

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Next, the value of HRA and Basic Pay that we've saved in IT0008 is as follows,

Processing in INHRA for first period:

Now, we can see the following in INHRA's Processing node inside the payroll log for payroll run of April 2020:

Here, the three factors for HRA exemption are calculated as follows:

1. 50% of HRA basis = 0.50 * (50000 + (50000 * 11)) = 300,000

2. HRA Paid = 27500 + (27500 * 11) = 330,000
3. Rent Paid - 10% of HRA basis = (25000 * 12) - 0.10 * (50000 + (50000 * 11) = 240,000

The minimum of the three factors above would be INR 240,000. Thus, the value of HRA exemption calculated in April 2020 by
INHRA would be INR 240,000.

Processing in INMHR for first period:

Now, if we check the processing in INMHR's Processing node for this same employee inside the payroll log for April 2020, we'll see,

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Here, the three factors for HRA exemption are calculated as follows:

1. 50% of HRA basis (monthly component) = 0.50 * 50000 = 25,000

2. HRA Paid (monthly component) = 27,500
3. Rent Paid - 10% of HRA basis (monthly components) = 25000 - (0.10 * 50000) = 20,000

The minimum of the three factors above would be INR 20,000. However, this is only the monthly value for April 2020. The total
HRA exemption for the entire year will be calculated by using this same value and projecting it for the rest of the Financial Year.
The calculation would be as follows,

Annual HRA = 20000 + (20000 * 11) = 240,000

Thus, the value of HRA exemption calculated in April 2020 by INMHR would be INR 240,000.

Thus, in this case the values calculated in INHRA and INMHR will be the same even though they use distinctly separate logics
to arrive at their values. However, master data changes are very common in the middle of the Financial Year, therefore, we'll
now see what happens when we input some master data changes.

Master Data for second period:

Here, we'll see the master data values for the second period of the financial year. The scenario is that the values have been
changed and no longer resemble the ones we entered earlier for the first period. Therefore, the Rent value in IT0581 has been
changed as follows:

Similarly, the master data in IT0008 has been changed as follows:

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Processing in INHRA for second period:

Now, we can see the following in INHRA's Processing node inside the payroll log for payroll run of May 2020:

Here, the three factors for HRA exemption are calculated as follows:

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1. 50% of HRA basis = 0.50 * (YTD + current month's value + projected value for rest of the year) = 0.50 * (50000 + 50000 +
(50000 * 10)) = 300,000
2. HRA Paid = YTD + current month's value + projected value for rest of the year = 27500 + 40000 + (40000 * 10) = 467,500
3. Rent Paid - 10% of HRA basis = (YTD Rent Paid + current month's rent + projected value for the rest of the year) - 0.10 *
(YTD HRA basis + current month's basis + projected value for the rest of the year) = (25000 + (50000 * 11)) - 0.10 *
(50000 + 50000 + (50000 * 10) = 515,000

The minimum of the three factors above would be INR 300,000. Thus, the value of HRA exemption calculated in May 2020 by
INHRA would be INR 300,000.

Processing in INMHR for second period:

Now, if we check the processing in INMHR's Processing node for this same employee inside the payroll log for May 2020, we'll see,

Here, the three factors for HRA exemption are calculated as follows:

1. 50% of HRA basis (monthly component) = 0.50 * 50000 = 25,000

2. HRA Paid (monthly component) = 40,000
3. Rent Paid - 10% of HRA basis (monthly components) = 50000 - (0.10 * 50000) = 45,000

The minimum of the three factors above would be INR 25,000. However, this is only the monthly value for May 2020. The total
HRA exemption for the entire year will be calculated by using the YTD value of HRA monthly exemption which will be added to the
current month's value and the current month's value will be projected for the rest of the Financial Year. The calculation would be as
follows,

Annual HRA = 20000 + 25000 + (25000 * 10) = 295,000

Thus, the value of HRA exemption calculated in May 2020 by INMHR would be INR 295,00. This is also shown in the
screenshot below:

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/3MR is the current month's HRA exemption component.

/3QP is the value of HRA exemption that is used to project the HRA for the rest of the year.

Thus, here we can see that the values of HRA calculation in INHRA and INMHR are now slightly different. This is an expected
behavior as the logic of these two functions is NOT the same.

IMPORTANT NOTE - INHRA will be sunset soon and will not be supported. It is recommended that customers switch to using
INMHR as soon as possible and explain the change in the logic to their business users to avoid any confusion down the line.

INVAL A - Indirect Valuation (Variant A)

Purpose:

The purpose of this Support Content is to show how Indirect Valuation (Variant A) can be used in Payroll India solution along with
general configuration tips for the same.

Overview:
This Support Content will cover explanation of INVAL A, general configuration tips and an example to show the usage of the same.

INVAL A - When to use:

INVAL A is used for India-specific employees where a wage type needs to be calculated as a fixed amount. This doesn't mean that
only a static value can be passed into the wage type configured for this method of Indirect Evaluation (further explanation will be in
the Example section of this Support Content), but in general, it is the simplest variant for INVAL.

INVAL A - General Configuration Tips:

1. View V_T511 - Here, we will configure the wage type to use the Indirect Evaluation Module as INVAL A. The screenshot
below shows the pertinent configuration entries.

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2. View V_T510_B - In this view we're going to configure the fixed amount of the wage type on which INVAL A will be applied.
The screenshot below shows the pertinent configuration entries.

INVAL A - Example:
1. No Reduction - In this example, the entire amount that we configured in the view V_T510_B will be pushed into the wage
type that we're using for demonstration. This is elaborated in the screenshot below.

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2. Reduction - In this example, the value that we configured in the view V_T510_B, will be reduced as per Capacity Utilisation
Level. This is further elaborated in the screenshot below.

Income Tax Surcharge Calculations Financial Year 2017 - 2018

How Tax & Surcharge Is Calculated - Male or Female Employee Who Is Not A Senior Citizen

"Image/data in this Support Content is from SAP internal systems, sample data, or demo systems. Any resemblance to real
data is purely coincidental."

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This section covers the below 4 scenarios (Click on the screenshot to see the enlarged view of the
screenshots):

1. Income of an employee is slightly more than 50 lacs

2. Income of an employee is more than 50 lacs but lesser than 1 crore

3. Income of an employee is slightly more than 1 crore

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4. Income of an employee is more than 1 crore

Income Tax Surcharge Calculations since FY 2013 -14

"Image/data in this Support Content is from SAP internal systems, sample data, or demo systems. Any resemblance to real
data is purely coincidental."

Purpose:

The purpose of this Support Content is to understand the PY-IN topic Surcharge calculation as per the Income Tax Law (since
financial year 2013-14).

NOTE: At the bottom of this page, you can find another link which explains the latest calculation scenarios for surcharge
calculations as per the latest rules and slabs of financial year 2017 - 18.

Overview:

To know more about this behavior, we must first review the necessary information, and then know how to reproduce it so that we
can understand the reason of it.

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1. Obtaining the necessary information:

For replicating the above scenario, let us understand the basic concepts and explanation of different behavior in 2 different cases.

2. Reproducing the behavior:

We will take 2 scenarios to show how surcharge calculation differs in both the cases. In first case, its 12% as per the current rates
i.e. FY 2015-16 however in second case, it shows lesser amount of surcharge i.e. not 12% but some other value.

3. Scenario 1:

Take an employee Mr. X (age 45 years). His total income for the year 2015-16 amounted to Rs.10030000. Will he be liable to pay
surcharge, if yes, then how much and will he get the benefit of marginal relief ?

(1) Normal tax liability (i.e. without marginal relief)

Tax on total income before surcharge (*) = Rs.2834000

Add: Surcharge (@ 12% on the amount of income-tax of Rs.2834000) = Rs.340080

Tax liability after surcharge (i.e., normal tax liability) = Rs.3174080

(2) Tax liability under marginal relief (i.e. after marginal relief)

Tax on Rs.1 crore (at standard rates 2015-16) = Rs.2825000

Add: Income above Rs.1 crore = Rs.30000

Tax liability under marginal relief = Rs.2855000

Conclusion

Normal tax liability (i.e. without marginal relief) comes to Rs.3174080 and tax liability under marginal relief comes to Rs.2855000.
It can be observed that tax liability under marginal relief is lower and, hence, Rs.2855000 will be the tax liability before cess. Total
tax liability will be computed as follows:

Tax liability after marginal relief (*) = Rs.2855000

Add: Education cess @ 2% = Rs.57100

Add: Secondary and higher education cess @ 1% = Rs.28550

Tax liability= Rs.2940650

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4. Scenario 2:

Take an employee Mr. X (age 45 years). His total income for the year 2015-16 amounted to Rs.10630000. Will he be liable to pay
surcharge, if yes, then how much and will he get the benefit of marginal relief?

(1) Normal tax liability (i.e. without marginal relief)

Tax on total income before surcharge (*) = Rs.3014000

Add: Surcharge (@ 12% on the amount of income-tax of Rs.3014000) = Rs.361680

Tax liability after surcharge (i.e., normal tax liability) = Rs.3375680

(2) Tax liability under marginal relief (i.e. after marginal relief)

Tax on Rs.1 crore (at standard rates 2015-16) = Rs.2825000

Add: Income above Rs.1 crore = Rs.630000

Tax liability under marginal relief = Rs.3455000

Conclusion

Normal tax liability (i.e. without marginal relief) comes to Rs.3375680 and tax liability under marginal relief comes to Rs.3455000.
It can be observed that normal tax liability is lower and, hence, Rs.3375680 will be the tax liability before cess. Total tax liability will
be computed as follows:

Tax liability after surcharge (i.e., normal tax liability) = Rs.3375680

Add: Education cess @ 2% = Rs.67513.6

Add: Secondary and higher education cess @ 1% = Rs.33756.8

Tax liability= Rs.3476950

5. Relevant SAP Note Released for this change

Budget Changes 2013 - Surcharge Marginal relief corrections were delivered via SAP Note No. 1839995 - PY-IN: Budget Changes
2013 - Surcharge Marginal Relief

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Important Link:

Income Tax Surcharge Calculations Financial Year 2017 - 2018

Multiple Form 16
"Image/data in this KBA is from SAP internal systems, sample data, or demo systems. Any resemblance to real data is purely
coincidental."

Purpose:

The purpose of this Support Content is to understand the PY-IN topic which deals with multiple form 16 – when there is a change
in company code or transfer happening within a Financial year.

Overview:

To know more about this behavior, we must first review the necessary information, and then know how to reproduce it so that we
can understand the reason of it.

1. Obtaining the necessary information:

For replicating the above scenario, let us take an example of an employee hired from 01.04.2015, have the company code transfer
done middle of the tax year,
and then execute multiple Form 16 to check the behaviour.

2. Reproducing the behavior:

2.1 We first need to Activate Multiple form 16 in our system, as per the steps detailed in SAP note 500871 - Enabling of Multiple
Form 16

Here is the screenshot of SHDG transaction OR thru Program RSHDGF00 (SE38), which shows Multiple Form 16 is activated.

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Once Multiple Form 16 is activated from a particular financial year begin date then it must not be reverted back.
A global setting is provided to enable Multiple Form 16.
Begin date of financial year needs to be entered in this global field to enable Multiple Form 16 printing from that year onwards.

2.2 Employee hired from 01.04.2015 in Company code IN01, Payroll Area N6, and Personal Area IN01

2.3 Execute payroll for the employee until August 2015 as a live run.

2.4 Now transfer the employee from Company code IN01 to IN02, Payroll Area can still be the same N6, or can a different payroll
area, with Personal area as IN03,
EFFECT FROM 01.10.2015.

Kindly note that the change of Company code from 01.10.2015 in this case is done before September 2015 payroll is executed.

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2.5 Execute September 2015 payroll in live mode and check the payroll results RT table.

In this case, we can see that the Gross Salary, PTax, Conveyance exemption, Aggregate of Chapter VI exemption (EE PF
contribution) all will be prorated for 6 months.

2.6 Execute the payroll for October 2015, which will be for the new Company code IN02, payroll area N6 and Personal area IN03.
Check the Internal Tables COCD and F16 which get generated to capture the data related to the company code changes.

Further the Previous employment Details Function (INPET) will have the new wage types related to previous company code
payment (4V* wage types) be created.

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2.7 Payroll for this employee now executed until March 2016, and Payroll Cluster results RT can be checked for the period 12.2015.

The Payroll result values for the second company code - Gross Salary, PTax, Conveyance exemption, Aggregate of Chapter VI
exemption (EE PF contribution) will always be
calculated FOR THE WHOLE YEAR, even though the transfer is effective from 01.10.2015, i.e. Middle of the tax year. This is required
for Form 16 reporting.

2.8 We execute the form 16 report, for each of the company codes and check the values as reported.

A) Form 16 executed for company code IN01 (Period 01.04.2015 to 30.09.2015)

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Execute transaction PC00_M40_F16, enter the Personnel Number ,Company code ,Tax year, Click on Print Annexure , and press F8.

The values as reported in this case will only be related to the first Company code i.e.IN01

B) Form 16 now executed for company code IN02 (Period 01.10.2015 to 31.03.2016)

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Execute transaction PC00_M40_F16, enter the Personnel Number, Company code, Tax year, Click on Print Annexure, and press F8.

Form 16 for the second Company code will always report the total values for the whole Financial year, and this is legally
correct.
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The data related to the previous Company code will be shown under the “Annexure to Form No.16” under the heading
Previous Employment Salary u/s 17(1)

Note:-

1) Kindly refer 500871 - Enabling of Multiple Form 16 , which provided you the details about the necessary configurations as
required.

2) The Multiple Form 16 currently supports Company code transfer done from the first day of the Payroll period.

3) Transfers done from the Middle of the month are not supported for Multiple Form 16 .

4) Transfers done on the first day of payroll period necessarily have to be performed before running payroll of previous period so
that calculation of exemptions, perks and income tax are correct.

5)If this transfer was not known before running the payroll then a forced retro has to be executed for the last period.

6) Kindly refer KBA 2307610 - Multiple Form 16 - Incorrect results in the form before company code change which illustrates the
inconsistent reporting observed when points 4 or 5 as above are not followed.

NPS -Additional Deduction under Section 80CCD (1B) Scenario 1

Purpose:

The purpose of this Support Content is to understand the PY-IN topic which deals with the calculation of NPS Deduction under the
section Additional Deduction Under Section 80CCD(1B) under the following :-

Scenario 1
Employee has a contribution towards LIC (Infotype 0586), Employee does an additional NPS contribution thru Infotype 585
along with the PF contribution.

Overview:

To know more about this behavior, we must first review the necessary information, and then know how to reproduce it so that we
can understand the reason of it.

1. Obtaining the necessary information:

For replicating the above scenario, let us take an example of an employee hired from 01.04.2016 with a monthly salary of Rs.40,
000 having contribution towards LIC as Rs 35,000 (Infotype 0586).
He invests another Rs.170,000.00 in NPS (Infotype 0585) under the line item “Contribution to pension scheme of Central
Government” in the same Financial Year.

2. Reproducing the behavior:

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A) Employee in this case is hired from 01.04.2016, with a basic salary of Rs.40000/- per month.

B)Further he invests an amount of Rs.35,000 in LIC under infotype 0586, and Rs.170,000 in NPS under
infotype 0585
IT0585

IT0586

C) Here we will check how the deductions under various sections i.e. 80C, 80CCE, 80CCD (1) &80CCD (1B)
are calculated when payroll for the employee is executed.
Important:-
1.For providing the deduction under 80CCD (1), 10% of annual NPS Basis acts as one of the factors.
2. You need to ensure that cumulation class ‘43’ & ‘44’ are checked / ticked for all relevant wage types which
forms the monthly basis for NPS

D) Execute the payroll of the employee for the month of April 2016, and check the following functions in payroll
log:-
INS80
Input

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INS88
Input

Output

E) The wage types as calculated in INS88 in the Output can be explained as follows:-
If an Employee 'X' has monthly salary of Rs.40, 000 having contribution towards LIC as 35,000 inr. He invests
another 170,000 in NPS in the same Financial Year. He shall be able to claim total deduction as per calculation
shown below:

(a) 10% of Annual NPS basis = 10% * 4,80,000.00 = 48,000.00 INR

(b) Total NPS contribution = 170,000.00 INR

(c) Contribution towards 80c -LIC+Employee Provident Fund = 35,000.00 + 57.600,00 (/3f6) = 92,600.00 (/3i2)

(d) Remaining deduction allowed under 80CCE = (150,000-92,600) =57,400.00 INR

Deduction u/s 80CCD (1) (/3i7) = 48,000.00 INR [Minimum of (a), (b), (d)]

Deduction u/s 80CCD (1B) (/3i9) = 50,000.00 INR

/3i5 = Combined Employee 80CCD Exemption (/3i7 + /3i9) = 48,000+50,000=98,000.00 INR

Total Deduction (/3i1) = 92,600 [80C] + 48,000 [80CCD (1)] + 50,000 [80CCD (1B) = 190,600.00 INR

F) Execute the form 16 for the employee.

Check for the values appearing under point 9 -Deductions under Chapter VI-A

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Kindly note here that the Gross amount under (a) 80CCD (1B) (01) is shown as Rs.122, 000.00. This
after considering the above Rs.48000.00 which is taken as Gross amount under 80CCD (1).
The total of both is Rs.170, 000.00 which the employee actually invested as NPS contribution under Infotype
0585.

kindly Refer SAP note 2168787 - Additional Deduction Under Section 80CCD(1B) thru which the changes have
been delivered.

NPS -Additional Deduction under Section 80CCD(1B) Scenario 2

Purpose:

The purpose of this Support Content is to understand the PY-IN topic which deals with the calculation of NPS Deduction under the
section Additional Deduction Under Section 80CCD(1B) under the following :-
Scenario 2
Employee has a contribution towards LIC (Infotype 0585), NPS contribution (employee and employer) is done thru salary
(Infotype 0587) along with the PF contribution.

Overview:

To know more about this behavior, we must first review the necessary information, and then know how to reproduce it so that we
can understand the reason of it.

1. Obtaining the necessary information:

For replicating the above scenario, let us take an example of an employee hired from 01.04.2016 with a monthly salary of Rs.40,
000 having contribution towards LIC as Rs 30,000 (Infotype 0586). He further has NPS contributions done thru payroll, i.e. thru
Infotype 0587 in the same Financial Year.

2. Reproducing the behavior:

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A) Employee in this case is hired from 01.04.2016, with a basic salary of Rs.40000/- per month.

B)Further he invests an amount of Rs.30,000 in LIC under infotype 0586, and NPS contribution thru Payroll under Infotype 0587.

IT0586

IT0587

In this case, the Employee contribution and Employer contribution towards NPS are done as a fixed amount as well as NPS
percentage. Hence both the fields are maintained.

C) Here we will check how the deductions under various sections i.e. 80C, 80CCE, 80CCD, 80CCD (1) &80CCD (1B) are calculated
when payroll for the employee is executed.
Important:-
1.For providing the deduction under 80CCD (1), 10% of annual NPS Basis acts as one of the factors.
2. You need to ensure that cumulation class ‘43’ & ‘44’ are checked / ticked for all relevant wage types which forms the monthly
basis for NPS

D) Execute the payroll of the employee for the month of April 2016, and check the following functions in payroll log:-
INS80

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Output

Here /3FU is the Monthly Employee contribution to NPS which is calculated as follows:-

Rs.8000 as fixed amount + 15% of NPS basis (15%*Rs.40000) =Rs.14,000.00

/3FV is the Employee Annual NPS contribution amount = Rs.14,000*12 =Rs.168,000.00

INS88
Input

Output

Here we have the /3FS Employer Monthly contribution to NPS wage type calculated as follows:-
Rs.8000 as fixed amount + 15% of NPS basis (15%*Rs.40000) =Rs.14,000.00
/3FT is the Employer Annual NPS contribution amount = Rs.14,000*12 =Rs.168,000.00

E) The wage types as calculated in INS88 in the Output can be explained as follows:-

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If an Employee 'X' has monthly salary of Rs.40, 000 having contribution towards LIC as 30,000 INR. He further does NPS
contribution thru payroll for an amount of Rs.8000 as fixed deduction per month, and an additional 15% of his salary thru Infotype
0587 in the same Financial Year. He shall be able to claim total deduction as per calculation shown below:

(a) 10% of Annual NPS basis = 10% * 4,80,000.00 = 48,000.00 INR

(b) Total NPS contribution = 168,000.00 INR (/3FV)

(c) Contribution towards 80c -LIC+pf = 30,000.00 + 57.600,00 (/3f6) = 87,600.00 (/3i2)

(d) Remaining deduction allowed under 80CCE = (150,000-87,600) = 62,400.00 INR

Deduction u/s 80CCD (1) (/3i7) = 48,000.00 INR [Minimum of (a), (b), (d)]

Deduction u/s 80CCD (1B) (/3i9) = 50,000.00 INR

/3i5 = Combined Employee 80CCD Exemption (/3i7 + /3i9) = 48,000+50,000=98,000.00

/3i6 = Employer Deduction u/s Sec80CCD = 48,000 INR

In this case the deduction under Employer NPS will always be equal to Employee NPS share. Therefore /3i6 will be equal to
/3i7.

Total Deduction (/3i1) here will be calculated as follows:-

87,600 [80C] + 48,000 [80CCD (1)] + 50,000 [80CCD (1B) +48,000[Sec80CCD Employer] =Rs.233,600.00

F) Execute the form 16 for the employee.

1.Check for the values appearing under point 9 -Deductions under Chapter VI-A

Kindly note here that the Gross amount under (a) 80CCD (1B) (01) is shown as Rs.120, 000.00. This after considering the above
Rs.48000.00 which is taken as Gross amount under 80CCD (1).
The total of both is Rs.168, 000.00 which is the actual employee NPS contribution as per point (D) above!

2.Employer's Contribution to NPS will be added to gross salary Section 17(1) as can be seen in form 16.

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Gross salary = Basic Salary (Rs.40,000*12) + Employer NPS contribution (Rs.14000*12) = Rs.480,000+Rs.168,000

Further points to be noted:-

-Employer's contribution u/s 80CCD shall be treated as an exemption while calculating the annual tax liability of the employee.
-Employer's contribution u/s 80CCD will be over and above the limit of 150,000 INR under chapter VIA for the employee.
-Employer's contribution to NPS will be added to the monthly regular Income of the employee, i.e. /3FS Er NPS Cont will be added
to /124Mon Reg Inc wage type.
-Employer's contribution u/s 80CCD will be shown under point 9 A ,subsection (c) as Section 80CCD

Legality
-----------
Section 80CCD: Deduction in respect of Contribution to Pension Account
For FY 2014-15 (assessment year 2015-16)
Total Deduction under Section 80C, 80CCC and 80CCD(1) cannot exceed Rs 1,50,000.

For FY 2015-16 (assessment year 2016-17)

A new section 80CCD(1B) has been introduced to provide for additional deduction for amount contributed to NPS of up to Rs
50,000.
Therefore for financial year 2015-16, Total Deduction under Section 80C, 80CCC, 80CCD(1) and 80 CCD(1B) cannot exceed Rs
2,00,000.
From assessment year 2012-13, employer's contribution under section 80CCD(2) towards NPS is outside the monetary ceiling
mentioned above.

PTAX - Deduction Carry Forward

Introduction

Disclaimer: "Image/data in this KBA is from SAP internal systems, sample data, or demo systems. Any resemblance to real
data is purely coincidental."

This Support Content document explains the Deduction carry forward method in case of retro change relevant for PTAX
calculation. The PTAX deduction difference amount from retro pay period will be carry forward to current pay period and deducted
along with current pay period deduction amount.

PTAX are getting calculated within the payroll function INPTX, located in schema IN00

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WT relevant for PTAX calculation

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Scenario:
Consider an employee belongs to Assam State, Payroll is run up to Aug with salary of Rs 12,800/-

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Consider Slab maintained in V_T7INP4 is

AS01 1 3,499.99 0.00 INR

AS01 2 3,999.99 50.00 INR

AS01 3 4,999.99 65.00 INR

AS01 4 5,999.99 80.00 INR

AS01 5 6,999.99 95.00 INR

AS01 6 7,999.99 110.00 INR

AS01 7 8,999.99 125.00 INR

AS01 8 9,999.99 140.00 INR

AS01 9 11,499.99 155.00 INR

AS01 10 12,999.99 175.00 INR

AS01 11 14,999.99 195.00 INR

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AS01 12 9,999,999.99 205.00 INR

PTAX calculated for this salary is

Retro actively Salary increased from 12800 to 15400 from July

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When payroll in run in Sep, In Pay period 04 2014, for the new salary the PTAX should be deducted will be 205 but originally
deducted is 175, so the difference amount Rs 30 (205 – 175) is put into WT /AP1 (PTAX Paid in Retro) and /ZPG ( Interm. Dedn.
Carry forward)

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In Pay period 05 2014, for the new salary the PTAX should be deducted will be 205 but originally deducted is 175, so the difference
amount Rs 30 (205 – 175) is put into WT /AP1 (PTAX Paid in Retro) and /ZPG ( Interm. Dedn. Carry forward)

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In Pay Period 06 2014, /3P1 will be 205 and /ZP1 (PTAX Dedn. Carry Forward) will be 60 (30 + 30 of previous pay period 04 2014
and 05 2015 difference amount)

Similarly if there is a retroactive decrease in salary then in that case the difference amount is put into WT /AP1 (PTAX Paid in Retro)
and /ZPG ( Interm. Dedn. Carry forward) with negative sign in retro pay period and this amount is brought into WT /ZP1 (PTAX
Dedn. Carry Forward) with negative sign and deducted. Correspondingly /422 will be recalculated with lesser amount compared to
original amount due to retroactive salary decrease.

Note:

The calculation logic of Gross CF and Ddeduction CF can not be altered for a state once gone live.

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PTAX - Gross Carry Forward

Introduction

Disclaimer: "Image/data in this KBA is from SAP internal systems, sample data, or demo systems. Any resemblance to real
data is purely coincidental."

This Support Content document explains the Gross carry forward method in case of retro change relevant for PTAX calculation.
The PTAX basis Gross difference amount from retro pay period will be carry forward to current pay period and added with current
PTAX basis amount, PTAX deduction amount is decided based on Slab amount on the new PTAX basis amount (Current basis +
brought forwarded basis amount).

PTAX are getting calculated within the payroll function INPTX, located in schema IN00

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WT relevant for PTAX calculation

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Scenario:
Consider an employee belongs to Andhra Pradesh State, Payroll is run up to Aug with salary of Rs 14,800/-

IT 0008

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Consider Slab maintained in V_T7INP4 is

PTAX calculated for this salary is

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Retro actively Salary increased from 14800 to 15200 from July

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When payroll in run in Sep, In Pay period 04 2014, the new PTAX Basis is Rs 15,200/- but original PTAX basis was Rs 14,800/- and
PTAX deduction is calculated based on original PTAX basis (14,800) is 100 as per slab. Since method maintained in V_T7INP3 for
the slab is Gross Carry Forward, the difference in PTAX Basis amount Rs 400 (15,200 – 14,800) amount is carry forwarded and put
into WT /AP2 (PTAX Basis arrears) and /ZPT ( Interm. Gross Carry forward)

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In Pay period 05 2014, the new PTAX Basis is Rs 15,200/- but original PTAX basis was Rs 14,800/- and PTAX deduction is
calculated based on original PTAX basis (14,800) is 100 as per slab. Since method maintained in V_T7INP3 for the slab is Gross
Carry Forward, the difference in PTAX Basis amount Rs 400 (15,200 – 14,800) amount is carry forwarded and put into WT /AP2
(PTAX Basis arrears) and /ZPT ( Interm. Gross Carry forward)

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In Pay Period 06 2014, /3P2 will be Rs 16,000/- (current 15,200 + 800 (Gross difference brought forward) ), /3P1 will be 150 based
on the slab rate for Rs 16,000/- and /ZP2 (PTAX Basis arrears) will be 800 (400 + 400 of previous pay period 04 2014 and 05
2015 difference PTAX basis amount)

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Similarly if there is a retroactive decrease in salary then in that case the difference PTAX Basis amount is put into WT /AP2 (PTAX
Basis arrears) and /ZPT ( Interm. Gross Carry forward) with negative sign in retro pay period and this amount is brought into WT
/ZP2 (PTAX Basis arrears) with negative sign and /3P1 will be deducted based on the slab rate for new adjusted PTAX basis
amount. Correspondingly /422 will be recalculated with lesser amount compared to original amount due to retroactive salary
decrease.

Note:
The calculation logic of Gross CF and Ddeduction CF can not be altered for a state once gone live.

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PTAX - Retroactive PTAX Region change

Introduction

Disclaimer: "Image/data in this KBA is from SAP internal systems, sample data, or demo systems. Any resemblance to real
data is purely coincidental."

This Support Content document explains the system behavior for PTAX calculation

1) When there is a change in the employee's professional tax region retroactively and the system has already deducted the
professional tax for that region.

2) When the employee becomes non-eligible retroactively, for the period in which the system has already deducted the
professional tax.

PTAX are getting calculated within the payroll function INPTX, located in schema IN00

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WT relevant for PTAX calculation

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Scenario:

Consider an employee belongs to Andhra Pradesh State, Payroll is run till 31-Oct-2014 and PTAX is calculated for AP with
Rs 200 per month, retro actively 01-Jul-2014 is changed to Telangana.

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PTAX region mapping setting for the Personnel area and Personnel sub area

Consider Slab maintained in V_T7INP4 is

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Payroll is run for AP region, PTAX is calculated for AP was Rs 200 per pay period

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Retroactively from 01-Jul-2014, employee is region is changed to Telangana, So when running the payroll for pay period 08 2014, it
retro from pay period 04 2014. So it returns back Rs 200, put in /ZPB (Ptax refund) --> Rs 200 in retro periods and calculated
PTAX for Telangana are put in WT /3P1, /3P3, /AP1 (Ptax paid for retro) & /ZPG (Interm. Dedn. Carry fwd ) respectively from retro
pay period 04 2014 till pay period 07 2014.

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In Pay period 08 2015, total Retro refund value (200 * 4 months = 800) is put into /ZPR ( PTax refund –Outflow), the amount need
to deduct in retro is put in /ZP1 ( Ptax deduction carry fwd.) with (175 * 4months = 700)

/422 is calculated as 200 * 3 months in AP + 175 * 9 months in Telangana = 2175 is PTAX exempted amount for Income tax
calculation

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Note :

For non-monthly states refund of PTAX is not allowed. To Stop Refund (/ZPR ) user Exit : EXIT_HINCALC0_009 should be
activated and coding needs to written to stop refund.
Region code cannot be changed. (V_T7INRG)

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Payroll Rerun for the same period after Pre-DME before Exit Payroll due to Salary
Increase

Introduction

Disclaimer: "Image/data in this KBA is from SAP internal systems, sample data, or demo systems. Any resemblance to real
data is purely coincidental."

This Support Content document explains in case of Retro increase in salary after payroll is executed and Pre-DME processed
but Payroll is not exited. So Payroll for the same period is Re-Executed

Scenario :
Consider payroll is run for employee for pay period 02 2018 with salary as 80,000

Payroll Results calculated for this salary is

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Pre-DME process is run after the regular payroll

Payroll is not Exited and Salary is increased Retroactively

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Retro Salary Change Scenario & Net Payment Calculation Behavior

"Image/data in this Support Content is from SAP internal systems, sample data, or demo systems. Any resemblance to real data is
purely coincidental."

Purpose
The purpose of this Support Content is to understand the scenario of an employee whose salary is changed retrospectively and
how calculation happens for net payments..

Overview

Example

Here we will explain about a scenario where employee has already been paid for April 2018 month and the salary of this employee
changes retrospectively i.e. w.e.f. April 2018 and payroll to be run for the month of May 2018 and then check results for the net
payments in April and May months.

Prerequisites

Payroll results for the employee must exist for at least one period.

Reproducing the Behavior

Running the Payroll of newly hired employee

Hire an employee say from 01.04.2018 and maintain the salary of this employee e.g. 50000 INR per month as shown:

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Run the payroll of the employee for first period i.e. 01 2018 (01.04.2018 - 30.04.2018). Below screenshot shows the net pay formed
for period 01.2018 for this Personnel No.

Changing the salary of the employee (retrospectively) and see the changes in previous (April 2018) and current month's (May
2018) payroll run

Employee's Salary changed to 60000 INR wef April 2018 as per below screenshot

Run the payroll of May 2018 as per below selection screen

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Now you can see 2 records in simulation payroll run

Expanding 01/2018 ( 01.04.2018 - 30.04.2018 ) Regular payroll run in 02/2018

Check rule IN30 (as per standard system) where you will find /550 as per increased salary

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Check rule IN40 (as per standard system) where you will find /550 in Input Table IT and /560 formed in Output Table IT

Now in this, expand Retroactive accounting INDIA as shown below and double click on PDT IN54 GEN NOAB Submit B/F wage
types to RT

The example taken in this Support Content is just for 2 periods and in a real scenario this can be more than this. Hence you can
check this Retroactive accounting INDIA and try to find all /551 wage types available in IN54 (as delivered in standard system).

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Here you can see that difference amount of salary is passed as /551 in this (there can be many entries of /551 with some values).
In current example, only one /551 wage type is formed with the amount 10000 INR.

Checking final RT of this (retro) period:

01/2018 ( 01.04.2018 - 30.04.2018 ) Regular payroll run in 02/2018

Here /551 is present with the negative sign.

Expanding 02/2018 ( 01.05.2018 - 31.05.2018 ) Regular payroll run in 02/2018

Now we can find rule IN41 (in this period - can be ZN41 or some other in customers scenario).

Here you can see /552 present in the current period. Hence total of all /551 wage types in retro periods will form /552 in current
period in this rule.

Now check final RT

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Here /552 is present with the positive sign and which is added to the current net payment, henceforth increasing the total net pay
of employee.

Summary
This Support Content can be a used to troubleshoot the scenarios where /552 is formed in current period. In real scenarios where
there are more number of retro periods, you can check the Retroactive accounting INDIA of retro periods (of previous period of the
current one) and check how many /551 are formed and find the reason for the same.

References
Check documentation of Wage Types /550 , /551 , /552 (Transaction SM30 > View V_512W_D)
Check documentation of rules IN54 , IN30 , IN40 , IN41 (Transaction PE02)

S89 Relief Calculation

Introduction :

Disclaimer: "Image/data in this KBA is from SAP internal systems, sample data, or demo systems. Any resemblance to real data is purely coincidental."

This Support Content document explains the S89 Relief Calculation method in case of retro change in Salary or bonus payment
for the past financial year paid in current financial year. Also in case of advance payment of future financial year paid in current
financial year.

The retro increase in salary/bonus or advance salary is taxed at higher rate in current financial year as compared to original
financial year, the difference in tax amount the employee pays more when compared to original financial year is given tax relief

Legality :
“

RELIEF UNDER SECTION 89

Where by reason of any portion of an assessee’s salary being paid in arrears or in advance or by reason of his having received in
any one financial year, salary for more than twelve months or a payment of profit in lieu of salary under section 17(3), his income is
assessed at a rate higher than that at which it would otherwise have been assessed, the Assessing Officer shall, on an application
made to him in this behalf, grant such relief as prescribed. The procedure for computing the relief is given in rule 21A. This relief is
called relief u/s 89(1).

Scenario :

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Consider payroll is run for employee till pay period 01 2015 with below salary, Salary is increased retroactively from 01-Apr-2014 on
01-May-2015

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Original pay result for pay period 12 2014 calculated with old salary before retro salary increase

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During retro run For - pay period 12 2014 income tax will be recalculated in INTAX with respect new increased salary, new value will
be put in WT /3I2, /416, /418, /422 etc

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In Payroll Function IN42(Pay period 12 2014) original pay period 12 2014 value of WT /3I2, /416, /422 and /450 is picked up from
ORT table put into WT /6I2, /616, /622 and /650 respectively.

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In Payroll Function IN43 (Pay period 12 2014) system compare the new calculated value due to salary increase with Original value
for the pay period which is in DT table from IN42, update the difference in WT /6I2, /616, /622 and /650 in DT table and Old RT
value is updated for pay period 12 2014, Since difference is moved to WT /6I2, /616, /622 and /650.

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In Pay Period 02 2015 during income tax calculation this difference tax values which is existing in WT /6I2, /616, /622 and /650 is
displayed under the S89 table is added up to current value for 2015 tax calculation.

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Calculation of Tax with Arrears ( Current Year Tax rate)

/416 include in current /410+/411+/413 = 1107703 + 258000(/616) = 1365703

Similarly /432 include /3I2 + /6I2 also

Tax is calculated on this --> 165,244.00

Calculation of Tax w/o arrears( Current Year Tax rate)

Current year salary without arrears amount is /434 - /616 (258000) + /6I2(19200)

/434 Total Income --> 1118103 – 258000(/616) = 860103 + 19200(/6I2) (1,50,000 limit need to taken care in this calculation) =
879303

Tax is calculated on 879303 is --> 100860.6+ 3025.818 (Cess) = 103,887.00

Delta Tax current year = Tax with Arrears - Tax w/o arrears in current year

Delta Tax current year = 165,244.00 - 103,887.00 = 61,357.00

Delta tax previous year = /650 (56,650.68)

Total relief amount = Delta Tax current year (61,357) - Delta tax previous year (56650.68)

Total relief amount = 4706

Note :

There are 2 switches which is very important for S89 calculation

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Note :

Switches s89SW & s89TX value should not changed in Mid year, if you want to change the value always it should be done on 01-Apr
only.

Tax Rounding in Payroll Driver

Purpose:

The purpose of this Support Content is to explain how Income Tax relevant wage types like /418, /434, /450, /460 etc. are
processed and calculated within the system during payroll processing and further, how they're displayed on certain Statutory
Reports like Form 16 and Form 24Q.

Overview:

The first thing to understand regarding rounding-off of the wage types that will be discussed here, namely, /418, /434, /446, /447,
/448, /449, /450 and /460, is that their rounding-off is entirely based upon the value of a constant called TAXRO which is set up
the view V_T511K. However, before we get into the nitty-gritty we need an example in a standard system so that we can understand
how the different values of TAXRO affect the rounding-off of the wage types in question.

1. Checking the value of TAXRO in the view V_T511K:

The only configuration that really matters in this scenario is the value of TAXRO saved for the financial year whose payroll is
being run. Thus, we need to check the value of TAXRO in the view V_T511K. For the sake of this example, the TAXRO
constant is maintained with a value "2" in the pertinent view.

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2. Understanding the values of tax-relevant wage types in the function INTAX in the payroll log:

For the sake of this example, the payroll has been run for the period 1/2015. An important thing to note is that we are not
taking an example where Surcharge for annual income greater than INR 10.000.000 would become a factor. Now, if we
open the function INTAX within the payroll log, we can see the various tax-relevant wage types.

a. Balance (/418) - As per the documentation of the constant TAXRO, when the value of this constant is "2", the amount
stored in wage type /418 is rounded to INR 1.As per the logic of this wage types, the value of /418 is calculated by
subtracting the value in Section 10 exemptions from the value stored in Gross Salary, therefore the formula is as follows:

/418 = /416 - /130

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As can be seen in the picture above, these values are for /130 and /416 are 118.519,60 and 6.494.984,64 respectively. Thus,
the value of /418 should be,

/418 = 6.494.984,64 - 118.519,60 = 6.376.465,04

However, the value seen in the picture above is 6.376.465,00, because, as already stated, TAXRO constant has been saved
with value "2" due to which the value of /418 will be rounded to INR 1. Hence, we get a value in /418 which is rounded down
to the nearest INR 1.

b. Total Income (/434) - Now, moving on to the wage type /434, the documentation of the constant TAXRO states that
when the value of the constant is "2", the value stored in this wage type is rounded to upper value of INR 1 if last digit is less
than 5 but Rounded to INR 10 if last digit is equal to 5 or more. The calculation logic for /434 is as follows:

/434 = /430 - /432

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As can be seen in the picture above, the values of /430 and /432 are 6.376.465,00 and 159.197,17 respectively, Thus, the
value of /434 should be,

/434 = 6.376.465,00 - 159.197,17 = 6.217.267,83

However, as already discussed, when the last digit of the value calculated for /434 is greater than or equal to 5, then it will
be rounded to INR 10, thus, we get the value 6.217.270,00 instead.

c. Tax Payable (/446) - Tax Payable is calculated by subtracting the value stored in /444 (Aggregate of Chapter VIII) from
the value stored in /436 (Tax on Total Income). In our own example, there is no value in /444, however, for calculation of
/436 we will use the tax slabs as follows:

/436 = (10% * 250000) + (20% * 500000) + {30% * (6217270 - 1000000)} = 25000 + 100000 + 1565181 = 1690181

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As can be seen in the image here, the value of /446 is 1.690.181,00 which is the same as calculated.

d. Secondary and Higher Education Cess (/447), and Education Cess (/449) - As none of these wage types should be
rounded off under the value "2" for TAXRO, we see the calculation for all of them follows their normal calculation logic as
follows:

/447 = 1% * (/446 + /448) = 16901.81

/449 = 2% * (/446 + /448) = 33803.62

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As can be seen in the image above, the values calculated for /447 and /449 are 16.901,81 and 33.803,62 respectively, which
are the same as the ones we calculated.

e. Tax Payable and Surcharge (/450) - For the value of TAXRO maintained as "2", /450 should be rounded to upper value
of INR 1. The calculation logic for /450 is as follows:

/450 = /446 + /447 + /448 + 449

As Surcharge isn't applicable in our example, we will ignore /448 in this formula and thus, we get,

/450 = /446 + /447 + /449 = 1.690.181,00 + 16.901,81 + 33.803,62 = 1.740.886,83

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However, as per the value of TAXRO, there should be a rounding to upper INR 1. Thus, /450 should be 1.740.887,00, which is
exactly the value that can be seen in the image above.

f. Income Tax (/460) - Now, the value of /460 will NOT be rounded off in INTAX, instead it is rounded off in the PCR
called INTR. This is because /460 needs to consider any values, if present, as Voluntary Tax. For the value of TAXRO as "2",
the value of /460 should be rounded to INR 1. In the system, the calculation logic for /460 in the first month is as follows:

/460 = (/450) / 12

After that, /460 is calculated as,

/460 = (/450 - /456) / Number of remaining months.

Please note that this calculation logic doesn't take into account one-time payments made through INBTD as that is a whole
another discussion worthy of a separate Support Content.

As discussed earlier, this payroll was run for the period 1/2015, thus, we get the value of /460 as,/460 = (/450) / 12 =

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1740887 / 12 = 145073.91However, as per the value of TAXRO, the value of /460 should be rounded to INR 1 and thus, we
get the value 145.074,00.

Tax Simplifier Statement

Disclaimer: "Image/data in this KBA is from SAP internal systems, sample data, or demo systems. Any resemblance to real
data is purely coincidental."

Purpose
The purpose of this Support Content is to understand the PY-IN-PS topic Tax Simplifier Statement (TSS).

Overview

The Tax Simplifier Statement is an Employee Self-service (ESS) application that facilitates an Employee to:
Get an overview of all the salary components and the Income Tax calculations for the current financial year
View the projected income tax figures for the current financial year, based on the changes made in the following components:
Additional Payments
Income from Other Sources
Income / Loss from House Property
Section 80
Section 80C Deductions
This solution displays on a PDF, the details of components such as gross salary, statutory deductions, income from other sources,
deductions under chapter VI-A, tax deducted till date, monthly details and so on. This helps the employee to check how the Income
Tax for the current financial year will be affected.

Reproducing the Behavior

Configuration in LPD_CUST for ESS Portal:

For configuration of TSS (Tax Simplifier Statement), refer Document LINK

Configuration in LPD_CUST for ESS Portal:

Run Transaction LPD_CUST in backend system.

Role/Instance = ESS/MENU (in standard config. – this might be different if you have customized the same)
Under Payment > Double Click on Salary Statement and Income Tax Projection
On Right hand Side: Check as per the below screenshot:

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Hiring an Employee:

This Support Content has been created on 17.07.2016 (system date). Hire an employee from say 01.02.2016. Maintain data e.g. in
IT0008, IT0585/IT0586 etc. Initially at the time of hiring, the salary of EE (employee) 100000.00 INR and the payroll was run in
live till May 2016 month with this salary. Later IT0008 employee’s salary was changed from 100000.00 INR to 110000.00 INR with
effect from the date of hiring i.e. 01.02.2016. Now the payroll of June month created S89 table and /616 as 20000.00 INR (10000
INR increment for Feb and March 2016 both the months).

IT0105 Subtype 0001 is maintained as below:

Execute the payroll as per the period on current system date (TSS gets generated as per date on which it is generated)

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Check results in Payroll Simulation Log

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Running TSS in ESS (Employee Self-Service)

Running TSS from Backend:

Run transaction SE80 > Enter Package name as PAOC_ESS_REP_IN

Expand Web Dynpro > Web Dynpro Applicat. > HRESS_A_REP_IN_SSITP

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Test the service as shown in the screenshot

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Running TSS from Frontend Portal:

Go to Employee Self-Service Portal > Payment > Click on Salary Statement and Income Tax Projection

Which launches the same TSS as run from the backend through the package as shown earlier.

Results in TSS

Check TSS where an employee can also edit the investment or income details and click on Generate PDF to see the modified results in the TSS.

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Additional / Relevant Information related to TSS

Link to GUIDE

KBA (SAP Note No.) 2323557

Tax rate INBTD Regular run calculation for April Payroll different to Marginal Tax
Rate (WT 404)

Introduction :

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Disclaimer: "Image/data in this KBA is from SAP internal systems, sample data, or demo systems. Any resemblance to real data is purely coincidental."

This Support Content document explains the Calculation method of Tax rate it has calculated for ‘INBTD’ regular run which is run in April Payroll, which is different to Marginal Tax rate (WT
/404 ) of current financial year.

Scenario :
Consider payroll is run for employee till pay period 11 2015 with below salary

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As per the regular salary /434 is less than 10 lacs, so it falls under 20% slab rate, WT /404 is 20.6 %.

Suppose Bonus amount of 3 lacs paid in pay period 12 2015 employee, because of this bonus amount this employee falls under 30% slab rate

In April, the employee salary is increased as below

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You can see /404 Marginal tax rate is 30.9 % based on the new salary of 2016 but Tax Deducted at Source for Bonus amount is deducted at 20%, the reason for it is tax rate is being
calculated based on previous months CRT and not taking into account the current month RT as the various WT's (/410, /411, /413 etc.) are formed in current pay period INTAX payroll
function which is executed after payroll function 'INBTD'. So, the previous months CRT will be read to calculate the marginal tax rate for tax deductions in INBTD payroll function.

If onetime bonus paid during April payroll then Previous pay period value /410, /413 etc are taken for determining marginal tax rate for bonus amount. Note WT /411 will not be taken from
previous pay period for April as it is cross year.

In the month of April, when the bonus in paid, the INBTD function calculates the tax according to the below formula.

The gross salary is calculated as below

/416 = /410(March) + /411(April) - /414(March)

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/418 = /416 - /130(March)

/426 = /418 - /422(March)

/434 = /426 - /432(March)

By this calculation you can see for this employee in example falls under 20% tax bracket.

INBTD deducts the tax as per the slab rate of the employee in the previous payroll.

Tax rate on the onetime payment is derived from the previous month income, so if the employee is in 20% slab in previous month then tax will be deducted on 20% only irrespective of
whatever slab rate employee is in current pay period.

This will not change the annual tax liability and that remains the same. So in case the tax is deducted higher or lower that will be adjusted in the remaining months.

WT 4MI calculation based on Feature 40MWT in retro

Introduction

Disclaimer: "Image/data in this KBA is from SAP internal systems, sample data, or demo systems. Any resemblance to real
data is purely coincidental."

This Support Content document explains the /4MI Calculation method in case of retro change in Salary or bonus payment for
the current financial year based on the feature 40MWT value.

Scenario :

Consider payroll is run for employee till pay period 11 2015 with below salary, Salary is increased retroactively from 01-Apr-
2015 on 01-Mar-2016

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Payresult for Pay period 11 2015 before the salary increase

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During Retro calculation /4MI should be changed or not is decided by the constant INMWT value

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If the value of INMWT is maintained as 0 then during the retro pay period /4MI value will not get changed where as in the
current pay period /4MI will have retro brought forward difference with current value.

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If the value of INMWT is set to 1, then using the Feature 40MWT return value the retro execution behavior is controlled, which
quarter value of /4MI should be recalculated is decided based on the Feature 40MWT return value.

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If the 40MWT value is ‘1’ then all the quarters /4MI will be recalculated, INTAX recalculated for all the pay period. During the
recalculation WT /460 will not change, only /4MI will be changed for all the quarters.

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So in RT WT /460 – Income tax paid doesn’t change

In Pay period 12 2015, the Balance tax will be deducted in WT /460 and retro pay increase is paid.

Formula for /4MI calculation :

/4MI = {( /416 -/125- sum of previously paid /4MI's ) / (/401+1)} +/125

If Feature 40MWT return value is maintained as ‘2’ - indicates that the system recomputes the tax components for all the
quarters, except the first quarter.

For Q1 Wage type /4MI will not be changed in INTAX calculation itself, there is no processing happens in INTAX for Quarter 1,
So there is no /4MI change for Q1, From Quarter 2 onwards /4MI will be recalculated similar to 40MWT value as ‘1’

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Similar to this if 40MWT value is maintained as ‘3’, it will recalculated from Quarter 3, if the value of 40MWT is ‘4’ it will
recalculate from Quarter 4. If the feature 40MWT return value is ‘0’ system recomputes only the current quarter and if feature
40MWT return value is ‘5’ then system will not recompute for any quarter, result will similar to INMWT value as ‘0’ maintained.

Note :

If Form 24Q is already generated and Filed before retro run with old /4MI value

Then you need to Unmap the challan mapping of old /4MI value and redo the challan mapping for the pay period for which retro
run changed the /4MI value, then regenerate Form 24Q with new /4MI value and refile F24Q.

Kindly go through the KBA for additional info Note : 2926800 - From 24Q does not report retro payroll results

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