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Payroll India (PY-IN)

Purpose
This component enables the running of the payroll for all employees in line with Indian legal and business requirements.

Implementation Considerations
The SAP HR Payroll India component must be implemented in cooperation with project teams implementing other areas of SAPHuman Resources (HR), in particular SAP HR Personnel Administration.

Integration
The SAP HR Payroll India component integrates with other SAP HR components such as Personnel Administration and Personnel Time Management. There are interfaces to Financial Accounting and Controlling. You can run payroll using a combination of SAP and third-party products.

Features
The component uses data from other areas of SAP HR for calculating all statutory and non-statutory additions and deductions for your employees. SAP HR Payroll India offers a number of standard reports used in payroll, superannuation, leave, advance payments and taxation. In addition to the standard payroll functions, the payroll processing for India also comprises the following country-specific functions:
Indirect Evaluation Basic Increments Dearness Allowance Housing Car and Conveyance Long Term Reimbursements Claims Bonus Income Tax

Section 80 Section 89(1) Third Party Deductions Income from Other Sources Tax on Arrears 1 1 Exemptions 11 Exemption on Leave Travel Allowance 1 1 Exemption on Medical Reimbursements 1 1 Exemption on Medical Insurance 1 1 Exemption on Child Education Allowance

1 1 Exemption on Child Hostel Allowance 1 1 Exemption on Other Allowances and Reimbursements 1 1 Exemption on Leave Encashment 1 1 Exemption on Voluntary Retirement Scheme 11 Previous Employment Tax Details
Professional Tax Provident Fund Employee State Insurance Labour Welfare Fund Nominations Minimum Net Pay Recovery of Rounding off Amounts Loans Enhancement One Day Salary Deduction Mid Year Go Live Termination Work Bench Gratuity Superannuation Form 24 Form 16 Form 217(A)

SAP HR Payroll India supports retroactive accounting. This function automatically recalculates payroll in the event of changes to master data and time data in periods for which payroll has already been completed

Indirect Evaluation (INVAL) and 40ECS Feature


Purpose
Indirect Evaluation is a method to calculate the eligible amounts for some of the wage types. INVAL is the Indirect Evaluation Module used to meet the Indian specific business requirements. INVAL calculates the eligible amounts for certain wage types that are defaulted into the Basic Pay infotype (0008) or entered in the Recur. Payments/Deductions infotype (0014) and the Additional Payments infotype (0015). When you populate the Long term reimbursements infotype (0590), the infotype checks the INVAL amounts for eligibility. The Claims programs also check the INVAL amounts while processing claims. In addition to, or instead of, computing the eligibility as a currency value amount, INVAL can also calculate the eligibility in terms of numbers, if the wage type has been configured accordingly. For example, an employee can be eligible for 50 liters of petrol. When you are populating the Basic Pay infotype (0008), the wage types get defaulted into the infotype depending on the Pay Scale Grouping for Allowances of the employee. Pay Scale

Grouping for Allowances determines the eligible wage types for the employee. For some of these wage types, which get defaulted into the Basic Pay infotype (0008), the eligible amounts also get defaulted. This happens due to Indirect Evaluation Module INVAL. For Recur. Payments/Deductions infotype (0014) and Additional Payments infotype (0015), if you enter an INVAL wage type, the eligible amount will get defaulted into the infotype. This is also due to Indirect Evaluation. In case of Basic Pay infotype (0008), Recur. Payments/Deductions infotype (0014) and Additional Payments infotype (0015), if you overwrite the Indirectly Evaluated amounts, the amounts entered by you are valid. In this case, the indicator for indirect evaluation will get cleared. Again, if you delete this overwritten amount, the default amount and the indicator for indirect evaluation will get selected. The INVAL amount for a default wage type for an employee may change in the middle of the year. In this case, you can check the eligibility amount on a particular date, by entering that date as the start date of the Indirect Evaluation field at the bottom of the Basic Pay infotype (0008). There are four module variants for INVAL:
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1. A This calculates the value of the wage type as a fixed amount. 2. B This calculates the amount as a percentage of a base wage type added to a fixed amount. More than one such amount, with same or different percentage of the base wage type, can be calculated for an INVAL wage type. In this case, the amount that will be Indirectly Evaluated will be the sum of all such calculated amounts, added to a fixed amount. For example, for the wage type M230, the different INVAL B amounts are:
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a. 10% of MB10 b. 30% of M220 c. Fixed amount of Rs.1000 In this case, the INVAL amount for the wage type M230 will be the sum of a, b and c. 3. C This calculates the amount as a percentage of a base wage type subject to a maximum limit. More than one such amount, with same or different percentage of the base wage type, can be calculated for an INVAL wage type. In this case, the amount that will be Indirectly Evaluated will be the sum of all such calculated amounts, subject to a maximum limit. For example, for the wage type M230, the different INVAL C amounts are:
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a. 10% of MB10 b. 30% of M220 c. Limit of Rs.5000 In this case, the INVAL amount for the wage type M230 will be the sum of a and b subject to a maximum of c. 4. D This calculates the amount as one or any combination of the following INVAL Module variants based on Basic salary slabs:
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a. Fixed amount b. Percentage of a base wage type added to a fixed amount c. Percentage of a base wage type subject to a maximum limit In the SAP system, INVAL D can be configured as only INVAL B or C. Once the percentage of the base wage type is calculated, the result is multiplied with a factor. This resultant amount is then added to fixed amount or is compared with a maximum limit. For example, the INVAL module variant for the wage type M210, for an employee who falls in the Basic Salary slab of Rs.10,000 12,000, is INVAL C. The INVAL amounts are: i. 10% of MB10 ii. 30% of M220 iii. Multiplication factor of 50%

iv. Limit of Rs.7000 In this case, the INVAL amount for M210 for the employee is the sum of i and ii, multiplied by iii and the result is subject to a maximum of iv. If you want to configure the wage type as a fixed amount for a particular slab, the wage type is configured as INVAL B. In this case, the percentage of the base wage type is multiplied with the factor of 0% and then the fixed amount added to the result. For example, the INVAL module variant for the wage type M230, for an employee who falls in the Basic Salary slab of Rs.15,000 25,000, is INVAL B. The INVAL amounts are:

iii. Fixed amount of Rs.5000 In this case, the INVAL amount for M230 for the employee is the value of i, multiplied by ii and the result added to iii. In this case, the INVAL amount will be the fixed amount of Rs.5000. For defining INVAL D, instead of using only the Basic Salary to be compared with the salary slabs, you can use the user exit EXIT_SAPLHRPADINA1_006, available in the Enhancement HRINRAP5, to define additional wage types to be added to the Basic Salary. The sum of all these wage types can then be compared with the salary slabs for the computation of INVAL D. The base wage type in case of INVAL B, C or D may be the Basic Salary, the Dearness Allowance or/and any other wage type the employee is eligible for. Only those factors, which affect the compensation of the majority of employees are assigned to Pay Scale Grouping for Allowances. There are some compensation factors that affect selected employees only. These compensation factors are not considered to define the Pay Scale Grouping for Allowances. These pay parameters are configured through the Feature to determine the eligibility for RAPs Feature (40ECS). Example of such parameters are, number of dependents, marital status, years of experience in the organization. Only the wage types that are Indirectly Evaluated can be further calculated using the 40ECS feature. This feature determines the factor which is multiplied with the INVAL amount to arrive at the amount payable to the employee. For an employee, a wage type may be evaluated using INVAL. But the same wage type may be configured in the 40ECS Feature for the employee. In this case, the factor returned by the 40ECS Feature will be multiplied with the INVAL amount and the total will be defaulted into the respective infotypes. For example, an employee is eligible for a Leave Travel Allowance of Rs.24000 according to Indirect Evaluation. But you can configure the 40ECS feature, so that an employee who has children will get 25% extra for each child for a maximum of two children.

1. 2. 3.

i. ii.

100% of MB10 Multiplication factor of 0%

Implementation Considerations
If you want Indirect Evaluation for a wage type, you have to define it as a characteristic of the wage type. To do this, go to the IMG under Payroll India: Reimbursements, Allowances and Perks Maintain Wage Type Characteristics. You have to maintain each INVAL wage type for a Pay Scale Grouping for Allowances in the IMG for Payroll India: Reimbursements, Allowances and Perks Calculate Eligibility for RAPs. If you want the payroll to check the 40ECS Feature to determine the eligible amount for a particular wage type, you must configure the wage type in the IMG under Payroll India: Reimbursements, Allowances and Perks Calculate Eligibility for RAPs.

Integration
In case of SAP GUI Defaulting and Indirect Evaluation for the Housing (HRA / CLA / COA) and Conveyance wage types happen only when you populate and save the respective infotypes Housing (HRA / CLA / COA) infotype (0581) and Car & Conveyance infotype (0583).

Features
The important pay parameters that can be configured through the 40ECS feature are: Number of children for children education allowance Number of children for children hostel allowance In case of these parameters, you also have to configure the relevant wage types in the IMG under Payroll India: Reimbursements, Allowances and Perks Calculate Eligibility for RAPs. In this table view, you must select Check for Ee characteristics in the Elig Check field. Whether a child is eligible for Child Education Allowance or for Child Hostel Allowance, or whether a dependent is eligible for any other allowance, is entered in the Family/Related Person infotype (0021). The 40ECS feature checks this infotype and accordingly calculates an eligibility amount for each of the allowances for each employee. The other parameters that can be configured through the 40ECS feature are: Country Grouping Company Code Payscale Grouping for Allowances Wage Type Job Gender Key Marital status key Region (State, Province, County) Personnel Number Start date

Constraints
Indirect Evaluation requires that the base wage type, on which the evaluation of any other wage type depends, should have been evaluated previously. For example, wage types MB10 and M230 are evaluated indirectly and M230 is evaluated as a percentage of MB10. Then, it is required that MB10 be evaluated prior to M230 in the Basic Pay infotype (0008). See also: Indirect Evaluation and 40ECS Feature Definition Pay Scale Grouping for Allowances

Basic - General Increments Report (HINIBSG0)


Use
This function is used to perform a batch update of increments in the Basic Salary wage type in the Basic Pay infotype (0008).

Prerequisites
You must have maintained the IMG activities under Payroll India Basic Salary for India.

Activities
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1. From SAP Easy Access menu, choose Human Resources Payroll Asia/Pacific India Utilities Basic General Increments. The Basic - General Increments report screen appears. 2. Enter the Personnel number and Pay Scale Grouping for Allowances of the employees to whom you want to give increments in the Basic Salary. 3. Enter the date from which the increment has to be effective. 4. Enter the name of the batch session. 5. Choose Program Execute.
6. The system conducts the following eligibility checks:

a. The system checks the current Pay Scale Grouping for Allowances of the selected employees. If this Pay Scale Grouping for Allowances is not the same as that entered by you on the selection screen, the employee is rejected. b. The system checks whether the increment Effective Date entered by you on the selection screen falls in the last split of the Basic Pay infotype (0008). If it does not, the employee is rejected. c. Depending on the Pay Scale Grouping for Allowances of the employee, the system reads the Basic Salary and Personal Pay wage types of the employee from the table view Basic Wages (V_T7INB1). The system reads the Basic Pay infotype (0008) for the current value of Basic Salary and Personal Pay wage types. d. Based on the current Pay Scale Grouping for Allowances of the employee, the system reads the Basic Code and the Method Type from the table view Basic Codes for Allowance Groups (V_T7INB5). e. Based on the Basic Code and the Method Type, the system reads the table view Basic Slabs (V_T7INB7) for the salary slab in which the basic pay of the employee falls.

f. If the current basic pay of the employee is the greater than or equal to the upper limit of the highest slab, the employee is rejected. g. If the current basic pay of the employee does not fall in any slab, the employee is rejected. h. If the Method Type is Increment by Amount, the system adds the increment amount to the current basic pay to compute the new current basic pay. i. If the Method Type is Increment by Percentage, the system reads the table view Basic Slabs (V_T7INB7) for the type of percentage method. Accordingly, the system calculates the new basic pay and adds it to the current basic pay to arrive at new current basic pay. The list of employees eligible for the increment appears.

7.

8. You have the following options on the output screen: a. Increment - Select this option to process the increment for all the
eligible employees. The system creates a batch session. You can execute this batch session to update the Basic Pay infotype (0008).

b. Ambiguous Cases - Select this option to display the ambiguous cases. For example, employees for whom the Effective Date that you have entered on the selection screen does not fall in the last split of the Basic Pay infotype (0008). c. Errors - Select this option to display all error cases. For example, employees for whom the Pay Scale Grouping for Allowances is not the same as the one that you have entered on the selection screen.
The Ambiguous Cases and the Errors are for information only.

d. Download - Select this option to download the results in the desired


format.

Dearness Allowance
Purpose
This component enables the computation of Dearness Allowance. Dearness Allowance is a non-statutory allowance that you pay to an employee on a monthly basis. The payment of this allowance relates to the changes in the cost of living in a particular location. The Dearness Allowance is related to the Consumer Price Index (CPI) for a given location, and the state authorities generally revise the CPI on a quarterly basis.

A change in employee status, such as a transfer or a promotion, may affect Dearness Allowance. The allowance consists of a fixed and a variable portion.
For a non-management category, you generally call this component the Dearness Allowance. For a supervisory category, you may call it the Cost Of Living Allowance (COLA).

Integration
DA forms a part of the salary basis for the other components of Payroll India. For example, the Dearness Allowance along with the basic salary typically forms the salary basis for computation of:
Income Tax Gratuity Professional Tax

Features
Batch Program - DA (Report) (HINIDAB0) This report computes the Dearness Allowance for a selected range of employees and generates a batch program. Upon execution, the batch program updates the Basic Pay infotype (0008) of the employees. Dearness AllowanceComputations The standard SAP system provides the following methods for the computation of Dearness Allowance:

11 11 11 11 11 11

Non-Slab based calculation Basic slab based calculation Incremental basic slab based calculation CPI slab based calculation Incremental CPI slab based calculation Basic slab based calculation, subject to minimum value

You can configure the Dearness Allowance computation method through the IMG under Payroll India Dearness Allowance.

Housing
Purpose
This component helps you create and maintain information on the employee accommodation. You can also compute the exemptions and perquisites applicable on a housing benefit.

Integration
Income Tax During the computation of the annual exemptions and perquisites, the Income Tax functionality also includes the exemptions and perquisite wage types of the housing functionality. 1.Basic Pay infotype (0008) When you create or modify a housing record using the Housing(HRA / CLA / COA) infotype (0581), in case of SAP GUI, the system dynamically updates the Basic Pay infotype (0008) with the new or changed wage type for Housing.

Features
1.The SAP system caters to the following categories of accommodation:

Rented Accommodation In a Rented Accommodation, the employee receives a House Rent Allowance (HRA) to meet the expenses incurred by renting a residential accommodation. The system computes an exemption on the rented accommodation. 11 Company Leased Accommodation (CLA) In a CLA, the company leases an accommodation and provides it as a housing benefit to the employee. Employee eligibility towards CLA depends on the Pay Scale Grouping for Allowances. If an employee has a CLA benefit, the system will compute the perquisite applicable on the CLA. 11 Company Owned Accommodation (COA) In a COA, the company owns the accommodation and provides it as a housing benefit to the employee. Employee eligibility towards COA depends on the Pay Scale Grouping for Allowances. If an employee has a COA benefit, the system will compute the perquisite applicable on the COA. 11 Hotel Accommodation In this case, the employer provides a hotel accommodation to the employee. If the stay in the hotel exceeds a fixed period, as specified by the Government, a perquisite is applicable on the cost of accommodation. If you have specified a perkable hotel accommodation in the Housing (HRA / CLA / COA)infotype (0581), the system will compute a perquisite. You can specify the Accommodation Type for an employee, and maintain the housing details using Housing (HRA / CLA / COA) infotype (0581). 1. If your company has provided furniture and helper(s) as a part of the accommodation, the system will compute the applicable perquisites.

1.To create and process the different categories of accommodation, the SAP system provides a standard set of Accommodation Types. For example:

Rented Accommodation Company Leased (Old) Perkable Hotel Accommodation


You have the option of creating your own Accommodation Types also. You can do so through the IMGunder Payroll India Housing Define Accommodation Types. 1.To process the Housing functionality, the system makes use of standard configurations. You can view these configurations using the following table views:

Housing code for taxation (V_T7INR1) Housing related statutory constants for taxation (V_T7INR5) Codes for Housing Types (V_T7INR7) City category for housing type (V_T7INR9)
SAP recommends that you do not change the default configurations of the tables listed above. 1.User Exits If you have created your own Accommodation Types, you must also specify the computation rules for these Accommodation Types. You may also need to define your own set of validations for the Housing (HRA / CLA / COA) infotype (0581). The Housing functionality provides the following user exits:

EXIT_HINCALC0_005 User Exit in the Enhancement HRINHRA0 With the help of this user exit, you can define the computation methods for the Accommodation Types defined by you. Use this exit to determine all the housing related wage types during a payroll run, in particular the exemption and the perquisite wage types. To access this user exit through the IMG, choose Payroll India Housing User Exit: Determine Perk Value for Housing.
When you create your own Accommodation Types and specify their computation rules, you must ensure that you also specify the computation rules for the standard set of Accommodation Types. This is because the standard computation rules will no longer apply on the any Accommodation Type.

11 EXIT_MP058100_007 User Exit in the Enhancement HRINHRA1 With the help of this user exit, you can define a customized set of validations, to be performed in the Housing (HRA / CLA / COA) infotype (0581). If the system performs a standard set of validations on the infotype, it may result in the generation of error messages. Using this user exit, however, you can override any error messages resulting from standard validations performed on the infotype data. To access this user exit through the IMG, choose Payroll India Housing User Exit: Screen Validations for Housing infotype.

Constraints
In the SAP system, you can only maintain one Accommodation Type for an employee, at one point in time. For the same From Period, you cannot create Housing records in the Housing (HRA / CLA / COA) infotype (0581) that have two different Accommodation Types. See also: Housing - Exemptions and Perquisites

Car and Conveyance


Purpose
This component enables you to process the:
Exemption on Conveyance Allowance Perquisite on Car Schemes and driver(s) provided by the company

Integration
The system reads the details for an employee maintained in the Car & Conveyance infotype (0583).

Features
Exemption 1.The system processes exemption on the conveyance allowance given to the employee. You must make the following configurations if you want to give a conveyance allowance and exemption to your employees:

If you require to, you can maintain new conveyance types to suit your company requirements. The SAP System provides you with some default conveyance types. To maintain new conveyance types, go to the IMG under Payroll India Car and Conveyance Define Conveyance Types (V_T7INCA). 11 Maintain the wage types for a Conveyance Type and a Pay Scale Grouping for Allowance through the IMG under Payroll India Reimbursements, Allowances and Perks Calculate Eligibility for RAPs (V_T7INA9). 11 If you want these wage types to be defaulted in Basic Pay infotype (0008), you must maintain these wage types in table view Conveyance Allowance Eligibility (V_T7INC9), through the IMG under Payroll India Car and Conveyance Assign Eligibility Criteria for Conveyance Allowance.
If you have maintained the wage type in this table view, when you save the Car & Conveyance infotype (0583) record for an employee, a dynamic action is triggered, wherein the system takes you to the Basic Pay infotype (0008). The wage type that you have maintained will get defaulted into the Basic Pay infotype (0008). If it is an

INVAL wage type, the amount is also defaulted, else you have to enter an amount here and save the infotype.

11 Maintain the conveyance tax exemption limit of these wage types for tax code SCNV through the IMG under Payroll India Tax Tax Liability on Reimbursements, Allowances and Perks Assign Tax Code Limits to Wage Types (V_T7INT9).
You maintain payment wage types for all the Conveyance Types. But, only the Conveyance Type for which you require Exemption under Section 10, you should maintain the wage type entries in table view Taxability of Wage Types (V_T7INT9) for taxcode SCNV. 1.In case of a physically challenged employee under section 10(14)(xi), you must maintain an entry for the employee in Challenge infotype (0004) for the Challenge Type Disabled Sec10(14)xi (N1). 1.Exemption on Conveyance Allowance is the lesser of:
... ...

Actual payment made to the employee for conveyance Exemption limit

Amount maintained for tax code SCNV in table view Taxability of Wage Types (V_T7INT9). Amount maintained in Exemption limit for challenged constant (CHGEX) of table view Payroll Constants (V_T511P) for a physically challenged employee.

Perquisite Perquisite on Car Schemes and driver(s) provided by the company is valid only till financial year 2004 2005.

The system processes perquisites on Car Schemes that the employer provides to the employee. You must make the following configurations to maintain a Car Scheme and calculate perquisite on it:
1.You must maintain the car types through the IMG under Payroll India Car and Conveyance Define Vehicle Details (V_T7INC1). The Cubic Centimeter or the Horse Power of the car that you maintain here is used during the calculation of perquisite. 1.The SAP System provides you with some default Conveyance Types. If required, you can maintain conveyance types to suit your company requirements. To do this, go to the IMG under Payroll India Car and Conveyance Define Conveyance Types (V_T7INCA). Select Yes for the Car Detail Flag to define the conveyance type as a Car Scheme. In this case, you can capture the details of the vehicle in the Car & Conveyance infotype (0583). The system uses these details to calculate the perquisite value of the vehicle. 2.For a Pay Scale Grouping for Allowance and a Car Scheme, you can maintain the eligibility of an employee for

11 The number of cars 11 The maximum amount of all the cars. This is based on the price of the cars.

To maintain this, go to the IMG under Payroll India Car and Conveyance Define Amounts and Numbers for Car Schemes (V_T7INC7). The options that you get for the Car Scheme will be the ones for which you have selected Yes as the Car Detail Flag in table view Codes for Conveyance Types (V_T7INCA). 3.For a Pay Scale Grouping for Allowance and a Car Scheme, you must maintain the Car Type and you can maintain the maximum age of the car, that an employee is eligible for. To do this, go to the IMG under Payroll India Car and Conveyance Assign Type and Age of Car for Car Schemes (V_T7INC3). The options that you get for the Car Type will be the ones that you have maintained in table view Car Types Master (V_T7INC1).

The system provides you with the following Car Schemes:


1.Company Owned Car Scheme (COCS) In this case, the car is owned by the employer, and can be

Maintained by the employer Maintained by the employee


The perquisite amount for COCS depends on the Cubic Centimeter of the car. These perquisite values are stored in the table view Perk Valuation for Cars (V_T7INC5). This perquisite value is valid only for the first car. Ten percent of the total value of the second and third cars are taken as the perquisite values. This percentage is stored in the Car perk calculation rate constant (CRPRK) of table view Payroll Constants (V_T511K). 1.Own Your Car Scheme(OYCS) In this case, the vehicle is owned by the employee and is maintained by the employer. The system provides for following types of OYCS:

Availing Own Your Car Scheme (OYCS) In this case, the vehicle is a car. 11 Own Your Car Scheme Others (OYCS Others) In this case, the vehicle is an automotive conveyance other than a car.
The perquisite value for Availing OYCS and OYCS Others is the actual expenditure reduced by a particular amount. This particular amount depends on the Cubic Centimeter of the vehicle and is stored in the table view Perk Valuation for Cars (V_T7INC5). Actual expenditure can be the

11 Reimbursements made to the employee through Additional Payments infotype (0015) or through Recur. Payments/Deds. infotype (0014). 11 Notional reimbursement of the expenditure through Additional Payments infotype (0015) or through Recur. Payments/Deds. infotype (0014), in case the employer incurs the maintenance expenditure directly, for which the employee does not get a reimbursement.
Maintain the actual expenditure wage types for the tax codes,

11 SCNE in case of Availing Own Your Car Scheme (OYCS) 11 SCNO in case Own Your Car Scheme Others (OYCS Others)
You can do this through the IMG under Payroll India Tax Tax Liability on Reimbursements, Allowances and Perks Assign Tax Code Limits to Wage Types (V_T7INT9).

Legally, the Car Schemes, COCS (Old) and OYCS (Old), are not valid after September 30, 2002. In these cases, the perquisite value is calculated on the Horse Power of the car.

For a Car Scheme, the system calculates the perquisite value for an employee only if the indicator for perquisite calculation is selected in the Car & Conveyance infotype (0583). If the company is providing the employee with a driver or drivers for a Car Scheme, there is a perquisite value attached to a driver. This perquisite amount for a driver is stored in the table view Payroll Constants (V_T511P) 11 Perk value of driverconstant (DRVP1) Valid for the payroll period from October 1, 2001 onwards. 11 Perk value of driver (old) constant (DRVPK) Valid for payroll period until September 30, 2001. See also: Exemption and Perk Calculation for Car and Conveyance Car & Conveyance infotype (0583)

Long Term Reimbursements


Purpose
Long term reimbursements are benefits provided to the employees over a fixed period of years. The duration of the benefit generally varies between three to five years. In the SAP system, you can categorize Long Term Reimbursements into the following:
Hard Furnishing Scheme This is a benefit provided to employees for the purpose of acquiring movable capital items like furniture, fridge, washing machine, television, and computer. Soft Furnishing Schemeor Other Reimbursements This is a benefit provided to employees for the purpose of acquiring consumer capital items like carpets and curtains. Car Maintenance Scheme This is a benefit provided to employees for the purpose of maintenance of their car over a period of time.

Features
Long Term Reimbursements infotype (0590) You can maintain the Long Term Reimbursement claimed by the employees in this infotype and under one of the following subtypes:

Subtype SHFS For maintaining details on the hard furnishing schemes Subtype SSFS - For maintaining details on the soft furnishing schemes Subtype SCAR For maintaining details on the car maintenance schemes For more information, refer to Long Term Reimbursements infotype (0590).

1.Duration Companies assign a fixed period to long term reimbursements. This period is generally for three years or five years. You can configure the duration of a Long Term Reimbursement using the Determine block of years for Long term reimbursements feature (40LTR). To do so, go to the IMG under Payroll India Long Term Reimbursements Maintain block of years for Long Term Reimbursements. The duration of a long term reimbursements can be for a:

Fixed block of years, and having a fixed end date The begin date would be from the date on which the employee acquires the asset. For a particular reimbursement however, the End Date is already fixed in the system. Currently, this type of duration is applicable on Hard Furnishing schemes. You define the number of years in a block, and fixed End date of a block using the Determine block of years for Long term reimbursements feature (40LTR). Variable block of years Here you specify the begin date of a soft furnishing scheme, and the duration will be for a fixed block of years, starting from this begin date. This type of duration is applicable on Soft Furnishing schemes. The Determine block of years for Long term reimbursements feature (40LTR) returns the value for the duration of the soft furnishing scheme. Fixed block of years divided into smaller blocks The duration of the reimbursement is for a fixed block, and you in turn divide the block into smaller sub blocks or smaller validity periods. For every validity period, you define the eligible amount and the number of times that the employee can claim the long term reimbursement. This type of duration is applicable on the Car Maintenance scheme. For example, an employee is eligible to a Car Maintenance Allowance of Rs.15,000 for a block of 3 years. The employee can claim a maximum of Rs.5,000 every year. Within a year, the employee can submit a claim only twice. The Determine block of years for Long term reimbursements feature (40LTR) returns the value for the validity period of the main block. The Feature to determine the eligibility for RAPs feature (40ECS) returns the Begin Date and End Date for the sub blocks. It also returns the eligible amount and the number of times than an employee can make a claim in a sub block. For every sub block, you must configure the Begin Date and End Date, the eligible amount, and the limit on the number of times an employee can make a claim. To do so, you must create your own program, and then specify the name of this program (against the wage type for Car Maintenance Scheme) in the Feature to determine the eligibility for RAPs feature (40ECS).
If you have any other schemes with a disbursement type distributed over a block on n validity periods, you can create them using your own program and specifying the name of the program in the Feature to determine the eligibility for RAPs feature (40ECS). You can create your own subtype (Z***) through the table view Subtype Characteristics (V_T591A). 1.Eligibility Pay Scale Grouping for Allowances determines the eligibility of an employee towards a particular type of long term reimbursement. An employee may become eligible for a particular long term reimbursement at the time of joining, or with a promotion. In the standard SAP system, the eligible amount is indicated by the HFS

eligibility wage type (M213). The eligibility for this wage type is handled through Indirect Evaluation. In the case of a Hard Furnishing Scheme, if an employee joins your company after the start of a reimbursement block period, the system will prorate the eligible amount for the remaining block period. If the employee however, becomes eligible for a particular reimbursement because of a promotion, the system does not prorate the amount for the remaining period. The employee is eligible to the entire amount. 1.Perquisite There is a perquisite value attached to the various long term reimbursements that you offer to an employee, and the Calculate Hard Furnishing Perk Value payroll function (INHFS) calculates applicable tax on this perquisite value.

Hard Furnishing Scheme The authorities specify a fixed percentage as the perquisite value applicable on the assets availed by the employee during a financial year. This value is stored in the Calculate Hard Furnishing Perk Value constant (HFPRC) of the table view Payroll Constants (V_T511K). Soft Furnishing Scheme The system calculates perquisite value for the assets that an employee availed in the current financial year based on the perquisite percentage that you maintain in the Long Term Reimbursements infotype (590), subtype SSFS. Car Maintenance Scheme There is no perquisite value associated with the Car Maintenance Scheme, or other similar maintenance schemes that you create. See also:
1.Long Term Reimbursements infotype (590) 1.Pay Scale Groupings for Allowances 2.Indirect Evaluation

Claims
Purpose
This component enables the processing of claims submitted by an employee. Employees are eligible for certain monetary and non-monetary benefits, as a part of their compensation package. Employees submit a claim based on their eligibility, to avail these benefits. Reimbursement allowances can be of the following types:
Amount (monetary) Monetary claims are reimbursements against a particular eligibility amount. For example, a medical reimbursement, subject to a maximum amount of Rs.15,000/-, in a given assessment year. Unit or a number (non-monetary) Non-monetary claims are those claims that an employee typically makes for the purpose of company work. Claims of non-monetary nature are made in whole units. For example, protective clothing, briefcases, calculators, and number of litres of petrol. Claims of non-monetary nature are made in whole units. Amount, subject to a number limit on the number of times that you can claim the allowance For example, a stitching allowance eligibility of Rs.1000/- per financial year, for which the employee can submit a claim only twice in that financial year.

Slab based claims

Some types of reimbursements have a validity period that is greater than a year, and are called Long Term Reimbursements. In this case, the employee is eligible to a certain amount, and you pay this amount to the employee across several financial years. The validity period of such reimbursements can be either a fixed block of years, or may be dependent upon some event or action. For example, an employee is eligible for a car maintenance allowance with a validity period of four years. The validity period starts from the date of purchase of the car. For the first and second year, the employee is eligible for a car maintenance allowance of Rs.5000. In the third year, the eligibility is Rs.7,500 and in the fourth year, the eligibility is Rs,10,000. 1. You maintain slab based claims using the Long term reimbursements infotype (0590). For more information, refer to Long Term Reimbursements. 2. While submitting a claim, an employee must also submit a proof of expense (monetary benefit), or a proof of entitlement (non-monetary benefit). Some reimbursable allowances are exempt from tax for a certain limit. The employee can claim the tax exemption by submitting a proof of expense or a proof of entitlement.

Features
Reimbursement for Employees transaction (PC00_M40_REMP)

You can process claims using the Reimbursement for Employees transaction (PC00_M40_REMP). In this transaction, you can disburse claims through a:
Regular payroll run The system updates the Additional Payments infotype (0015) with the information that you enter in this report, and disburses the claim along with the regular payroll. Off-cycle payroll run The system updates the One-Time Payments Off-Cycle infotype (0267) with the information that you enter in this report. The approved claims can be disbursed through an off cycle payment process. For example, claims may be disbursed on the same day, or all claims submitted during the week may be disbursed on one particular day of the week. Processing of Claims

The Pay Scale Grouping for Allowances determines the Reimbursement Types for which an employee is eligible. You define the different Reimbursement Types through Tax Codes. For more information, on Tax Code configuration, refer to the IMG under Payroll India Tax Tax Liability on Reimbursements, Allowances and Perks Assign Tax Code Limits to Wage Types. The following criteria determine the processing of a claim: 1. Eligibility
The system determines whether an employee is eligible for a particular reimbursement or not, using Pay Scale Grouping for Allowances. A reimbursement can be either monetary or non-monetary in nature. If the reimbursement is:

Monetary in nature, the system determines employee eligibility through the Indirect Evaluation of a particular Reimbursement Type. If an Individual Reimbursements infotype (0589) exists for an employee, the system will determine the eligibility for that employee using the infotype instead of through Indirect Evaluation. You can also restrict the number of times that a claim is made within a validity period. If there is a change in the eligible amount for the employee, the system prorates the same accordingly. For more information, refer to Indirect Evaluation. Non-monetary in nature, the system determines employee eligibility using Pay Scale Grouping for Allowances. If an Individual Reimbursements infotype (0589) exists for an employee, the system will determine the eligibility for that employee using the infotype instead of through Pay Scale Grouping for Allowances.
You can configure the eligibility for the non-monetary reimbursements in the RAP no field of the table view Reimbursement Allowances Perks - eligibility and calculations (V_T7INA9). If there is a change in the Pay Scale Grouping for Allowances of the employee, the system prorates the employee eligibility to a rounded up value, as per configurations.

Monetary in nature, but with a limit on the number of times the employee can make a claim. The system determines the eligibility through a combination of Indirect Evaluation (monetary) and Pay Scale Grouping for Allowances (nonmonetary).
If you want to configure your own eligibility criteria, you may do so through the user exits provided in the system. For more information, refer to the IMG under Payroll India Reimbursements Allowances and Perks User Exit: Save and Retrieve Claims Data. For more information, refer to Pay Scale Grouping for Allowances.

2.

Validity Period
You can configure the validity period of a reimbursement through Pay Scale Grouping for Allowances and Reimbursement Types. For a Reimbursement Type, you can define different kinds of validity periods, such as monthly, quarterly, semi annually, or annually. For more information on configuring reimbursement wage types, and specifying their validity periods, refer to the IMGactivity under Payroll India Reimbursements, Allowances and Perks Calculate Eligibility for RAPs.

3.

Period end treatment


At the end of the validity period of a particular Reimbursement Type, you can configure the system to treat the unclaimed balances in the following ways:

Balance disbursement The system pays the unclaimed balance to the employee. Balance carry forward The system carries forward the unclaimed balance across one or more validity periods. Lapse The system neither disburses the unclaimed balances of a validity period, nor does it carry it forward to the next validity period. For more information, see Period End Treatment of Claims.

Reports

You can generate the following reports using the Claims functionality:

Status for Claims report (HINCREMS) To check the balance and the status of claims made by employees. Claims Carry Forward Balance report (HINCREMC) To carry forward the unclaimed balances for a reimbursement wage type. You can run this report only once during validity period and it is advisable that you run it at the end of the validity period. Claims Balance Disbursement report (HINCREMT) To disburse the balance at the end of the validity period. Claims Balance upload program (HINUUPCF) To upload employee Claim status/balance from a local database file into the SAP system. You typically use this report to upload Claims Balance information from a legacy system. In the event of your company going live in the middle of the financial year, or if there are any carry forward balances that need to be carried forward to the year of going live, you can use this report and upload the data. For example, you are going live on 1st April, and there are balances of the Medical reimbursements for the previous financial year, which needs to be carried forward into the current year. You can upload this legacy information into the SAP system using the Claims Balance upload program (HINUUPCF).

User Exits

For customization purposes, you have been provided with user exits for:
1.Saving and printing additional claims information Using the screen enhancements provided in the Reimbursement for Employees transaction (PC00_M40_REMP), you can record additional claims information which is specific to your organization. For more information, refer to the IMG under Payroll India Reimbursements Allowances and Perks Claims Capture Additional Claims Disbursement Information User Exit: Save and Print Claims additional information. Determining the Carry Forward Dates You can create your own company specific dates for carrying forward the unclaimed balances at the end of their validity period. For more information, refer to the IMG under Payroll India Reimbursements Allowances and Perks Claims User Exit: Determine Carry Forward Dates. Saving and retrieving claims data You have an option to save the claims data generated using the Reimbursement for Employees transaction (PC00_M40_REMP) in customized tables and infotypes. For more information refer to the IMG under Payroll India Reimbursements Allowances and Perks Claims Badi: Save and Retrieve Claims Data. Calculating the eligibility The standard SAP system determines the employee eligibility for a Reimbursement Type based on factors such as the Pay Scale Grouping for Allowances, Personnel number, and Tax code. You also have an option to create customized eligible amounts, or numbers, for a Reimbursement Type. For more information, refer to the IMG under Payroll India Reimbursements Allowances and Perks Claims User Exit: Save and Retrieve Claims Data.

Bonus
Purpose
This component enables the processing of employee bonus. You can compute both regular and off-cycle bonus.

Integration
1. Additional Payments infotype (0015)
The SAP system updates this infotype after a regular bonus computation.

2. Additional Off-Cycle Payments infotype (0267) for off-cycle bonus


The SAP system updates this infotype after an off-cycle bonus computation.

Features
India specific Bonus calculation report (HINCBON0) This report computes the employee bonus. You have the option of computing bonus:

As per the Payment of Bonus Act On a monthly salary basis or an annual salary basis For ex-employees As a regular bonus or an off-cycle bonus or both
1.Off-Cycle Taxation When the bonus is as an off-cycle payment, the SAP system will compute the applicable Tax Deduction at Source (TDS). The Income Tax Deduction at Source for OffCycle Bonus Payment payroll function (INBTD) determines the rate of Tax Deduction at Source (TDS) for an off-cycle bonus. This function has the following parameters:

11 Param 1 - Determines the TDS computation method. Param 1 can have the following values:
...

BON1 Tax at a standard company wide rate BON2 Tax before bonus payment and at the marginal rate of tax, for individual employees. It is exclusive of surcharge. BON3 Tax before bonus payment and at the marginal rate of tax, for individual employees. It is inclusive of surcharge. BON4 Tax after bonus payment and at the marginal rate of tax, for individual employees. It is exclusive of surcharge. BON5 Tax after bonus payment and at the marginal rate of tax, for individual employees. It is exclusive of surcharge.

11 Param 2 - Determines the Tax Code for bonus. The standard SAP system has the Tax Code for Bonus as SBON. You can maintain your own tax code for Bonus through the table view Taxability of wage types (V_T7INT9).
For an off-cycle bonus, you also have the option of maintaining your own tax rates. To do so, go to the IMG under Payroll India Bonus User Exit: Determine Income Tax Rate on Bonus Paid through Off Cycle. For more information see, Off-Cycle Activities.

Income Tax
Purpose
This component computes tax on the income received by an employee for a financial year. Income of an employee may consist of all or any of the following components:
Regular Income - This is that part of the salary, which an employee receives every month and is projected for the entire financial year. For example, Basic Pay, House Rent Allowance, Conveyance Allowance.

Monthly regular income - Mon Reg Income wage type (/124). This wage type is the cumulation of the values of all the wage types for which you have configured the Cumulation Class as 24. Annual regular income - Ann Reg Income wage type (/410) The value of Ann Reg Income wage type (/410) is the sum of:
Value of Mon Reg Income wage type (/124) in the Cumulative Results Table Value of Mon Reg Income wage type (/124) for the current period Value of Mon Reg Income wage type (/124) for the current period, multiplied by the value of Projection Factor wage type (/401)

1. Value of the Projection Factor wage type (/401) is the number of remaining periods that payroll has to be run in the current financial year, for the employee. 2. The projection of the remaining periods can be until the end of the financial year or until the employee is terminated or the retirement date of the employee, whichever is the earliest. 3. System projects the annual regular income using either Actual Basis or Nominal Basis. The system by default uses Actual Basis to project annual regular income. You can access this from the IMG for Payroll India: Tax Maintain Annual Taxable Income.
We recommend that you use a single tax calculation method, either Actual Basis or Nominal Basis throughout the financial year, to project the annual regular income. Irregular Income - This is that part of the salary, which an employee receives for a particular period and is not projected for the entire financial year. For example, Leave Travel Allowance, Bonus.


...

Monthly irregular income - Mon Irr Income wage type (/125). This wage type is the cumulation of the values of all the wage types for which you have configured the Cumulation Class as 25. Annual irregular income - Ann Irr Income wage type (/411) The value of Ann Irr Income wage type (/411) is the sum of:

Value of Mon Irr Income wage type (/125) in the Cumulative Results Table Value of Mon Irr Income wage type (/125) for the current period Perquisite - Example, Housing Perk, Loan Interest Advantage.

Annual Perk wage type (/127)

Annual Perk wage type (/413) The value of Annual Perk wage type (/413) is equal to the value of Annual Perk wage type (/127). Prev Gross salary wage type (/4V1) Val of perk u/s 17(2) wage type (/4VJ) Profts wrt sal u/s 17(3) wage type (/4VK) These values are captured directly through the Previous Employment Tax Details infotype (0580). In case you have configured Multiple Form 16, these values are automatically captured in the system when an employee gets transferred from one group of the company to another group in a financial year. Income from Other Sources Any other Income wage type (/131) This includes the income captured through Income From Other Sources infotype (0584) Other Sources subtype (0002), and the profit and loss from House Property.

Previous Employment Salary

1.

Implementation Considerations
SAP provides you with the following configurations: 1. The slab codes are defined in the table view Slab Codes for Taxation (V_T7INT1) for a financial year/years. 2. The different taxation slabs for the tax codes are defined in the table view Taxation Slabs (V_T7INT3). These are legal settings and you cannot modify them.

Integration
India Income Tax computations payroll function (INTAX) computes the tax on the income received by an employee for a financial year.

Features
The system calculates the income tax for an employee after taking into consideration the following:
1.Exemption

Medical Exemption - Exm.under pro.to sec17(2) wage type (/414) Section 10 Exemptions - Exemption U/S 10 wage type (/130) The value of Exemption U/S 10 wage type (/130) is the sum of the values of: CEA Annual Exemption wage type (/4E1) - Exemption on Child Education Allowance CHA Annual Exemption wage type (/4E2) - Exemption on Child Hostel Allowance Conveyance Annual Exempt wage type (/4E3) - Conveyance Exemption HRA Annual Exemption wage type (/4E4) - Exemption on House Rent Allowance

LTA Annual Exemption wage type (/4E5) - Exemption on Leave Travel Allowance Prev exemp u/s10 wage type (/4V2) - Previous Employment Exemptions Voluntary Ret. Exemption wage type (/4E6) - Exemption on Voluntary Retirement Leave Salary Exemption wage type (/4E7) - Leave Exemption Allowance Gratuity Cont. Exemption wage type (/4E8) - Gratuity Exemption
In addition to these wage types, you can define your own annual exemptions for allowances and reimbursements using the General Payroll function for Allowance/Reimbursement Treatment (INCTX).

1.Deduction
...

11 Aggregate Deduction - Aggrg Deduction wage type (/424) The value of Aggrg Deduction wage type (/424) is the equal to the value of Empmnt tax (Prof Tax) wage type (/422) - Professional Tax.
Empmnt tax (Prof Tax) wage type (/422) includes the value of Prev prof. tax paid wage type (/4V3).

11 Chapter VI Section 80 Deductions - Agg of Chapter VI wage type (/432)


1.Relief Section 89(1) Relief - Sec 89 relief wage type (/451)

The system also takes into consideration the following components of tax while processing income tax for an employee:
1.Surcharge on Income Tax Surcharge of 10% is applicable on Tax payable wage type (/446) if the value of the Total Income wage type (/434) is greater than INR 10,00,000. The total income tax (including surcharge), that is, the value of Tax payable and surcharge wage type (/450) cannot exceed the sum of:

Income tax on INR 10,00,000 Amount of income that exceeds INR 10,00,000, which is the difference between the value of Total Income wage type (/434) and INR 10,00,000. Example
1.Education Cess All employees have to pay an education cess of 2%. Education cess is calculated as 2% of the sum of tax payable and surcharge. The India Income Tax computations payroll function (INTAX) calculates and stores the amount of education cess in the Education Cess wage type (/449). The value of /449 = 2% (/446 + /448). 2.Voluntary Tax An employee can choose to pay certain amount of tax, which is not based on any other component. The Voluntary tax deduction rule (INVT) calculates this Voluntary Tax. The system provides you with three options for voluntary tax deduction:

11 Deduction of an additional tax amount in a period without changing the annual tax deduction amount. The value of Income Tax wage type (/460), calculated for the period by India Income Tax computations payroll function (INTAX), is increased by this additional amount. This additional tax that is deducted in a particular period is adjusted in the following payroll periods. You have been provided with the model wage type Voluntary Tax (MVT0) for this purpose. HR-IN: Voluntary tax deduction rule (INVT) reads the value of Voluntary Tax wage type (MVT0) and uses the applicable tax rates of surcharge and education cess to divide this amount into the following tax components: 1. Tax payable The tax payable value is added to the value of Monthly Tax Payable wage type (/4MT). 1. Education cess The education cess value is added to the value of Monthly Education Cess wage type (/4ME). 1. Surcharge The surcharge value is added to the value of Monthly Surcharge wage type (/4MS). Deduction of a fixed tax amount in a period without changing the annual tax deduction amount. The value of Income Tax wage type (/460), calculated for the period by India Income Tax computations payroll function (INTAX), is replaced by this fixed amount. Tax deduction in the following periods is adjusted accordingly. You have been provided with the model wage type Voluntary Tax (MVT1) for this purpose. HR-IN: Voluntary tax deduction rule (INVT) reads the value of Voluntary Tax wage type (MVT1) and uses e applicable tax rates of surcharge and education cess to divide this amount into the following tax components: 1. Tax payable The tax payable value replaces the value of Monthly Tax Payable wage type (/4MT). 1. Education cess The education cess value replaces the value of Monthly Education Cess wage type (/4ME). 1. Surcharge The surcharge value replaces the value of Monthly Surcharge wage type (/4MS). Deduction of a fixed amount of voluntary tax over the annual tax liability. The Voluntary tax deduction rule (INVT) generates the Additional Voluntary Tax wage type (/462) for this fixed amount. The value of Income Tax wage type (/460), calculated for the period by India Income Tax computations payroll function (INTAX), is increased by the value of Additional Voluntary Tax wage

type (/462). This additional tax that is deducted is not adjusted in the following periods of the financial year. The total tax deducted in the year is increased by this fixed amount of voluntary tax. You have been provided with the model wage type Voluntary Tax (MVT2) for this purpose. The rule reads the value of Add. Voluntary Tax wage type (MVT2) and generates Additional Voluntary Tax wage type (/462). HR-IN: Voluntary tax deduction rule (INVT) then uses the applicable tax rates of education cess and surcharge to divide the value of Additional Voluntary Tax wage type (/462) into the following wage types: 1. Voluntary Tax Payable wage type (/4LT) 1. Voluntary Education Cess wage type (/4LE) 1. Voluntary Surcharge wage type (/4LS)
1.Tax on Arrears Tax on Bonus

The system allows you to generate the following tax reports:


1.Form 16 1.Form 24

See also: Previous Employment Tax Details

Section 80 Deduction
Purpose
Section 80 deductions are pre tax deductions from the Gross Taxable Income. Examples of components for Section 80 deductions are Contribution to certain Pension funds, Medical Premium paid, Donations to certain funds/charitable institutions and deductions for Permanent physical disability. The SAP System provides you with the all the Section 80 subsections and the divisions of the subsections. The maximum limit of contribution for each subsection and each subsection division has also been provided by the system. This means that even if you contribute more than the limit, the payroll will consider only the limit for tax deduction. Some of the contributions under Section 80 deductions are fully tax deductible, while some are partly tax deductible. The percentage of deduction for each of them is also configured by the SAP System. A subsection of Section 80 may have different types of investments. Each of these different types of investments within a subsection is called a division in the SAP system. The employee can declare the amount he or she wants to contribute towards each division of the subsection of Section 80. This can be done at any point of time in the year. You can populate this as proposed contributions in the Section 80 Deductions infotype (0585). The tax for each period will be calculated outside the payroll based on this proposed contribution. The actual contributions can also be populated in the Section 80 Deductions infotype (0585). You can calculate the tax for an employee or for all employees by considering the actual contributions of the employee. This is typically done towards the end of the year, when the employee has submitted all his declarations. If you want to calculate the tax for all or selected employees based on actual Section 80 contributions, you can run the Batch Program for section 80 (HINIS800) for those employees, instead of updating the infotype record of each employee.

Contributions to Section 80 investments can be made directly from the payroll of the employee. In this case, you must maintain the contribution details in the Membership Fees infotype (0057). In this case, the contribution amount for a particular subsection or division will be calculated by adding the contributions maintained in the Membership Fees infotype (0057) and the Section 80 Deductions infotype (0585). Section 80C and Section 80CCC Section 80C and Section 80CCC deductions are applicable from financial year 2005 2006 onwards. The deductions under Section 80C includes all the investments that were valid under Section 88 till financial year 2004 2005. From financial year 2006-2007, Fixed Deposit investments are also eligible for Section 80C deductions. These deductions are applicable if the Fixed Deposit is: For a fixed period of not less than five years From a scheduled bank

In accordance with a central government framed and notified scheme You can enter these deductions in the system using Section 80C Deductions infotype (0586). The deductions under Section 80CCC includes certain pension funds. The maximum amount of deduction available is INR 1,00,000. This includes the total of Section 80C and Section 80CCC deduction.

Integration
The payroll reads the Section 80 data from the Section 80 Deductions infotype (0585) for the purpose of tax deduction. In case of a physically challenged employee, you have to create a Challenge infotype (0004) record and store the relevant disability information there. As soon as you save this infotype record, a Membership Fees infotype (0057) record for Section 80U deduction is created automatically for the employee. The employee gets this tax deduction each year for as long as the above two infotype records are valid. Section 80 Contribution Detailsfunction (P0585) retrieves the data from the Section 80 Deductions infotype (0585) and updates the cluster table S80. Processing Request for Membership Fees function (P0057) retrieves the data from the Membership Fees infotype (0057) and updates the table P0057. Third Party Deductions payroll function (INTPD) reads S80 and the table P0057, and updates the cluster table S80. Section 80 Deductions for India payroll function (INS80) processes the cluster table S80 to generate the wage type for Total Section 80 deduction (/3I1). Actual Section 80 deduction wage type (/432) is the lower of the Total Section 80 deduction wage type (/3I1) and the Gross Total Income wage type (/430). Gross Taxable Income wage type (/434) is equal to Gross Total Income wage type (/430) minus Actual Section 80 deduction wage type (/432).

Features
The parameters for Section 80 subsections and divisions have been configured in the SAP System as follows:
...

1. In the table view Subsection description (V_T7INI5), the subsection descriptions have been maintained. 2. In the table view Subsection limit (V_T7INI7), the maximum limits for each subsection has been maintained. 3. In the table view Sub division description (V_T7INI8), the subsection division descriptions have been maintained.

4. In the table view Sub division details (V_T7INI9), the upper limit of contribution, the percentage to be considered for tax deduction and the validity periods for the subsection divisions have been maintained. You do not need to configure these views. If you are populating the Section 80 data for an employee from the Membership Fees infotype (0057), you must configure the wage types for those Section 80 subsections or divisions. To do this, go to the IMG under Payroll India: Tax Third Party Deductions Configure Wagetypes for Section 80. You can configure more than one wage type for a subsection or a division. If you want to add any subsections or divisions to Section 80, you have been provided with a user exit EXIT_HINCALC0_003 in the Enhancement HRINITAX. You can access this from the IMG for Payroll India: Tax Tax Liability on Reimbursements, Allowances and Perks User Exit: Define User Rules for Section 80 and 88. See also: Third Party Deductions

Section 89(1) Relief


Purpose
This component computes the relief from tax in case of
Arrears payments of past financial years. There can be situations where the payments that pertain to previous financial years are made in the current financial year. These payments typically arise due to salary revisions or bonus payments in this financial year for past financial years. Advance payments of future financial years. There can be situations where the payments that pertain to future financial years are made in advance in the current financial year.

There can be situations where the arrears or advance salary is taxed at a higher rate in the year of receipt as compared to the year to which it pertains. In such a case, the employee is given a relief from tax. This relief is the amount of additional tax that the employee pays in the current year on account of receiving the arrears in the current period as against having received it in the year to which it pertains.

Integration
During a retroactive payroll run across financial years, the following wage types will be populated in the Difference table (DT) for the last period of the retrospective year:
1.Add Gross Salary wage type (/616) This wage type stores the difference between the Gross Salary actually paid and that including the arrears payments. 2.CF Empmnt tax (Prof Tax) wage type (/622) This wage type stores the difference between the Professional Tax deducted for that year and the amount that would have been deducted if the arrears were paid in the year to which it pertains. 3.CF Section 88 Investment wage type (/6I2) This wage type stores the difference between the Section 88 for that year and the amount that would have been contributed if the arrears were paid in the year to which it pertains. This difference in Section 88 contribution arises due to the difference in Provident Fund contribution.

4.Add Tax payable and surch wage type (/650) This wage type stores the difference between the Tax and Surcharge deducted for that year and the amount that would have been deducted if the arrears were paid in the year to which it pertains.

In the DT, the year for which the wage type pertains to is also mentioned against the wage types. For example, in the current period April 2002, if there is a retrospective run from 2000 onwards, then in DT, /616 wage type will appear for the two years, 2000 and 2001, separately. Same is applicable for the other three wage types mentioned above. The India Income Tax computations payroll function (INTAX) reads the DT for these wage types and generates the cluster table S89. Taking the above example, in April 2002, the India Income Tax computations payroll function (INTAX) will read the DT for the above four wage types for the two years, 2000 and 2001, and will generate the cluster table S89. In case of a retroactive run across financial years, if the Results Table (RT) does not exist For Period 12 In Period 12 for an employee, the system will stop the processing of the payroll for the employee and will display an error message. There are some exceptions: 11 In case of a retroactive run across financial years for an employee who was terminated before Period 12 of the year for which the retrospective payroll run is being executed, the Results Table (RT) does not exist For Period 12 In Period 12. In this case, the values of the above four wage types in the DT will be incorrect. The Modify DT with the latest available results in the 'for year' for S89 operation (INDTL), however, corrects the values of these wage types in DT. This operation is called by the Personnel calculation rule IN91 (IN91) of the Retroactive accounting INDIA schema (INNR). 11 In case of a retroactive run across financial years for an employee who joined the organization in Period 12, and whose payroll was not run in Period 12, the Results Table (RT) does not exist For Period 12 In Period 12. In this case, you must set the value of the Cross fin Yr retro from March constant (CYFRM) of table view Payroll Constants (V_T511K) to 1. The default value of this constant is 0. You can do this in the IMG under Payroll India Tax Section 89(1) Relief Configure Cross Financial Year Retro for March.

Features
1.In case of Rebates and Statutory Deductions, the previous year's original amounts are taken into consideration while recalculating tax for that year. The extra amount is carried forward to the current period and treated accordingly. For example, while calculating tax for the previous year by including the arrears payments, the amount deducted as Professional Tax remains unchanged. The additional amount that should have been deducted if the arrears payments had been made in the previous year, is stored in the Professional Tax Difference wage type (/622). This amount is treated as part of the current year's Professional Tax amount for calculating current year's tax including arrears. 1.In case of Exemptions, the arrears payments made in the current year for the previous year is also taken into consideration while recalculating tax for that year. For example, while calculating tax for the previous year including the arrears payments, the House Rent Allowance (HRA) exemption is recalculated for the previous year.

1.You can choose, at the implementation level, to provide Section 89(1) Relief to your employees. In the Sec 89 Switch Implement. level constant (S89SW) of the table view Payroll Constants (V_T511K),

Set the Value field to 1, if you want to provide Section 89(1) Relief to your employees. Set the Value field to 0 or leave the field blank, if you do not want to provide Section 89(1) Relief to your employees.
To do this, go to the IMG under Payroll India Tax Section 89(1) Relief Maintain Sec89(1) Switch at Implementation Level. 1.You can provide Section 89(1) relief to certain employees, even if you have chosen not to provide the relief to your employees at the implementation level. To do this, in the Other Statutory Deductions infotype (0588) 0004 subtype, select the indicator for Section 89(1) eligibility at employee level

Third Party Deductions


Purpose
This component provides for the calculation of Section 80 deduction and Section 88 rebate when payments to external parties are made directly from the payroll of the employee. For example, LIC Premium, Mediclaim. These deductions are in addition to the declarations that an employee makes for the Section 80 and Section 88 contributions through Section 80 Deductions infotype (0585) and Investment Details (Sec88) infotype (0586), respectively. You do not require to maintain the details in these two infotypes for the the Section 80 and Section 88 deductions processed through the payroll. For Third Party Deductions, you can make an entry through Basic Pay infotype (0008), Recur. Payments/Deds. infotype (0014), Additional Payments infotype (0015) and Membership Fees infotype (0057). If the Third Party Deductions are made through Membership Fees infotype (0057), along with the past and the present payments, the projected payments will also be considered while calculating tax. The amount the employee proposes to contribute in the future months of the financial year is also taken into consideration, by the system, while calculating the total Section 80 and Section 88 contributions. If you make the Third Party Deductions through Basic Pay infotype (0008), Recur. Payments/Deds. infotype (0014) or Additional Payments infotype (0015), the system will only consider the past and present contributions while calculating tax and not the projected contributions.

Integration
The different types of deductions through Membership Fees infotype (0057) have to be maintained as subtypes of the infotype. To do this, go to the IMG under Payroll India Tax Third Party Deductions Define Membership/Deduction Types.

If you are making Third Party Deductions through the Membership Fees infotype (0057), you must maintain the wage type for this infotype through the IMG for under Payroll India Tax Third Party Deductions Check entry permissibility for Membership Fees Infotype (0057).

The Third Party Deductions payroll function (INTPD) reads the internal tables S80, S88, P0057 and the wagetypes in the internal table, and updates the internal tables S80 and S88.

Feature
If you are making Third Party Deductions and you want the system to calculate tax after taking Section 80/Section 88 contributions into consideration, you must configure the wage types for the different:
Divisions or the subsections through the IMG for Payroll India Tax Third Party Deductions Configure Wagetypes for Section 80. Types of contributions through the IMG for Payroll India Tax Third Party Deductions Configure Wagetypes for Section 88.

See also: Membership fees infotype (0057)

Income from Other Sources


Purpose
This component helps you to consider for taxation, the income that is incurred from sources other than that from your employment, in the current financial year. The SAP System divides the income from other sources into: Income from House Property Income from Other Sources

Implementation Considerations
If an employee chooses to declare income from sources other than that from current employment, then that income also has to be taken into consideration for taxation during a regular payroll run.

Integration
The system reads the details from the Income from Other Sources infotype (0584). The Income From Other Sources payroll function (P0584) reads the Income from Other Sources infotype (0584) and generates the internal table IOS. Deduction under Section-24 payroll function (INS24) and Details of Income from Other Sources payroll function (INIOS) read the Internal Table and the internal table IOS for the Income from House Property subtype (0001) and Income

from Other Sources subtype (0002) data, respectively and generates the following wage types in the Internal Table: /3O1 - Annual Lettable Value This is the amount that you have entered as the Final Lettable Value in the Income from Other Sources infotype (0584) Income from House Property subtype (0001), for either Partly Let Out House Property or Wholly Let Out House Property. /3O2 - Business Profits This is the amount that you have entered as the Business Profits in the Income from Other Sources infotype (0584) Income from Other Sources subtype (0002). /3O3 - Long Term Capital Gains (Normal Rate) This is the amount that you have entered as the Long Term Capital Gains (Normal Rate) in the Income from Other Sources infotype (0584) Income from Other Sources subtype (0002). /3O4 - Short Term Capital Gains This is the amount that you have entered as the Short Term Capital Gainsin the Income from Other Sources infotype (0584) Income from Other Sources subtype (0002). /3O5 - Income from Dividends This is the amount that you have entered as the Income from Dividends in the Income from Other Sources infotype (0584) Income from Other Sources subtype (0002). /3O6 - Income from Interests This is the amount that you have entered as the Income from Interest in the Income from Other Sources infotype (0584) Income from Other Sources subtype (0002). /3O7 - Other Income This is the amount that you have entered as the Other Income (Unspecified) in the Income from Other Sources infotype (0584) Income from Other Sources subtype (0002). /3O8 - Deductions u/s 23 /3O9 - Deduction u/s 24 (Interest) This is the amount that you have entered as the Deduction of Interest under section 24 in the Income from Other Sources infotype (0584) Income from House Property subtype (0001). /3OA - Deduction u/s 24 (House Repairs) This is the amount that you have entered as the Deduction on Account of Repairs under section 24 in the Income from Other Sources infotype (0584) Income from House Property subtype (0001), for either Partly Let Out House Property or Wholly Let Out House Property. /3OB - Deduction u/s 24 (Others) This is the amount that you have entered as the Deduction on Account of Other Expenses under section 24 in the Income from Other Sources infotype (0584) Income from House Property subtype (0001), for either Partly Let Out House Property or Wholly Let Out House Property. /3OD - Long Term Capital Gains (Special Rate) This is the amount that you have entered as the Long Term Capital Gains (Special Rate) in the Income from Other Sources infotype (0584) Income from Other Sources subtype (0002). /3OS - Short Gains on Listed Sec This is the amount that you have entered as the Short Term Capital Gains (Listed Securities) in Additional Payments infotype (0015) for the wage type associated with the tax code STCG. /3OG Gift Income

This is the amount that you have entered as the Gift Income in Additional Payments infotype (0015) for the wage type associated with the tax code SGFT. The sum of amounts in these wage types is added to the Any other Income wage type (/131). The amount in this wage type is added to the amount in Income under Head Salaries wage type (/426) to form the Gross Total Income wage type (/430). Section 80 Deductions are made from Gross Total Income wage type (/430) to form the Gross Total Income wage type (/434). Before calculating tax on total income, the system deducts the amounts in Long Term Capital Gains Normal Rate wage type (/3O3), Long Term Capital Gains Special Rate wage type (/3OD), Short Gains on Listed Sec wage type (/3OS) and Other Income wage type (/3O7) from the Gross Total Income wage type (/434). The tax calculated on Long Term Capital Gains, Special and Normal Rate, Short Term Capital Gains on Listed Securities and Other Income are added to the normal tax to form the Tax on Total Income wage type (/436).

Features
The parameters for Income from Other Sources have been configured in the SAP System as follows:
...

1. In case of Let out House Property (Wholly or Partly), the Deduction on Account of Repairs under section 24 is limited to a percentage of the Final Lettable Value. This percentage may vary across financial years. In the Repairs under Section 24 constant (REP24), of the table view Payroll Constants (V_T511K), this percentage has been maintained. 2. In the table view Payroll Constants (V_T511P), the maximum amount of interest for which you can get tax exemption under section 24 has been maintained. This amount may vary depending on the financial year during which the loan was taken. Following constants have been maintained for the different interest exemption amounts:
...

a. LNS01 - Rs.30,000 b. LNS02 - Rs.75,000 c. LNS03 - Rs.100,000 d. LNS04 - Rs.150,000 e. LNSMX - There is no limit in this case. The entire amount that you enter as the Deduction of Interest under section 24 in the Income from Other Sources infotype (0584) Income from House Property subtype (0001), for Self Occupied \ Deemed Self Occupied House Property, is tax exempt. 3. In the table view Payroll Constants (V_T511K), the rate of taxation for Long Term Capital Gains have been maintained in the following constants:
...

a. LCNRT - Long Term capital Gains (Normal Rate) b. LCSRT - Long Term capital Gains (Special Rate) 4. In the ST Cap. Gain rate (Listed Sec) constant (SCGRT) of table view Payroll Constants (V_T511K), the rate of taxation for Short Term Capital Gains on Listed Securities has been maintained. 5. In the Other Income - rate constant (OTHRT) of the table view Payroll Constants (V_T511K), the rate of taxation for Other Income (Unspecified) has been maintained. You can maintain whether a Loan Type is valid for Section 24 exemption. To do this, go to the IMG under Payroll India Company Loans Master Data Maintain Deduction Details Under Section 24. For details on configuring the IMG activity, refer to the IMG documentation.

Tax on Arrears
Purpose
This component provides for the arrears generated during the retrospective regular payroll run, to be taxed in the payroll run in which the arrears are paid. The arrears, arising due to salary increments, long term settlements or revision of loss of pay, are generally a high value figure. Spreading the tax on arrears over the remaining payroll periods of the financial year results in high tax incidence on the employee in the subsequent periods, with insufficient payments to match. In such a case, this functionality provides for the arrears generated during the retrospective payroll run to be taxed in the payroll run in which the arrears are paid.

Integration
During a retroactive payroll run, the arrears are stored in the Stat.net recalc.diff. wage type (/551). The Calculate Arrears for Taxation rule (INAR) reads, in the original period the Stat.net recalc.diff. wage type (/551) for each of the payroll periods and stores the total arrears in the temporary variable table. Determine TDS rate and Calculate Tax on Arrears rule (INTD) calculates the tax on arrears, stored in temporary variable table, at the rate brought forward by the Determine TDS % for arrears operation (INTDS) and stores this tax in the Income Tax wage type (/460).

Features
If the total arrears generated in the regular run exceeds a particular amount, then the arrears is taxed by the Determine TDS rate and calculate Tax on Arrears rule (INTD). You must maintain this particular arrears amount in the Arrear amount limit constant (ARLMT) of table view Payroll Constants (V_T511P). You must maintain the Determine TDS rate and Calculate Tax on Arrears rule (INTD) for the parameter of the Determine TDS % for arrears operation (INTDS). You must configure the Determine TDS % for arrears operation (INTDS) to determine the tax rate, based on any of the following parameters: a. BON1 - Standard tax rate at company level configured in Arrear Payment - TDS % constant (ARTDS) of table view Payroll Constants (V_T511K). b. BON2 - Marginal tax rate (excluding surcharge) before arrears, of an employee. c. BON3 - Marginal tax rate (including surcharge) before arrears, of an employee. d. BON4 - Marginal tax rate (excluding surcharge) after arrears, of an employee. e. BON5 - Marginal tax rate (including surcharge) after arrears, of an employee. i. You can maintain the Arrear Payment - TDS % constant (ARTDS) and Arrear amount limit constant (ARLMT) in the IMG under

...

Payroll India Tax Tax on Arrears Maintain Tax Limit and Tax Rate for Arrears Payment. ii. You can maintain the Determine TDS % for arrears operation (INTDS) in the Determine TDS rate and Calculate Tax on Arrears rule (INTD) in the IMG under Payroll India Tax Tax on Arrears Maintain Schema for Tax on Arrears. Employees, who have a low salary and have no tax liability, tax on arrears will not be calculated even when the parameter for the Determine TDS % for arrears operation (INTDS) is maintained as BON1.

Exemptions
Purpose
This component comprises of:
Exemption on Medical Reimbursements and Medical Insurance Premiums Exemption on Leave Travel Allowance Exemption on Child Education Allowance and Child Hostel Allowance Exemption on Other Allowances and Reimbursements Exemptions on Leave Encashment Exemption on Voluntary Retirement Scheme Exemptions on Housing Exemptions on Conveyance

Exemption on Leave Travel Allowance (LTA)


Purpose
This component calculates the tax exemptions applicable to Leave Travel Allowance (LTA). Your organisation can give LTA to the employees in the following ways:
...

By specifying an annual (normally, but not necessarily) amount for LTA and making payments against claims submitted by the employee. By giving the employee a certain amount as LTA on a monthly or a periodic basis. For more information on LTA reimbursements, see the Claims section.

Integration
Whenever an employee submits the travel tickets for LTA exemption as proof, you must create an Exemptions infotype (0582), LTA subtype record for the employee. You must create one record for every trip for which the employee is claiming an exemption. You can make the payments for LTA through the Basic Pay infotype (0008), Recur. Payments/Deds. infotype (0014), Additional Payments infotype (0015) or Additional OffCycle Payments infotype (0267). You must update the Previous Employment Tax Details infotype (0580) with the following LTA Exemption details:

The number of times the employee has claimed LTA Exemption in the current block of four years. Whether the employee has carried forward a trip for LTA exemption from previous block of four years to the current block.

Payroll functions WPBP, P0014, P0015 and P0267 read the Basic Pay infotype (0008), Recur. Payments/Deds. infotype (0014), Additional Payments infotype (0015) and Additional OffCycle Payments infotype (0267), respectively for LTA and populates the Input Table with LTA wage types. The total amount of payments in the curent period is stored in the LTA reimbursement wage type (/3L1). To read infotype 0582 payroll function (P0582) reads the Exemptions infotype (0582) and forms the Internal Table EXM. To calculate LTA exemption amount payroll function (INLTA) reads the:
...

Input table and the CRT for the LTA wage types for the total LTA payments in the current financial year. EXM for the total amount of the tickets submitted as proofs. The lesser of the amounts in a and b above, is the total LTA Exemption for the financial year.

Features
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1.There is no LTA exemption amount limit stipulated by the government. An employee can get an exemption of the entire allowance amount. 2.An employee can claim the LTA exemption for only two trips in a block of four years. The Begin Date and End Date of this block is maintained in the constants, LTA Slab Begin Year (LTABG) and LTA Slab End Year (LTAEN) respectively, of the table view Payroll Constants (V_T511K). 3.An employee can claim the LTA Exemption for self and for the dependents. 4.The employee has to submit the tickets as proof to avail of the tax exemption. The details of the declaration are populated in the Exemptions infotype (0582), LTA subtype. 5.If the employee has not claimed the LTA Exemption for one or both the trips in the current block, LTA Exemption for one trip can be carried forward to the next block. But this Exemption has to be claimed in the first year of the next block, otherwise the LTA exemption that is carried forward lapses. 6.Exemption against LTA is the lesser of:
...

Total LTA payments made for the financial year through Basic Pay infotype (0008), Recur. Payments/Deds. infotype (0014), Additional Payments infotype (0015) or Additional Off-Cycle Payments infotype (0267). Total amount of the travel tickets submitted as proof of travel and entered in the Exemptions infotype (0582), LTA subtype.

You must populate the Exemptions infotype (0582), LTA subtype with the details of the travel tickets submitted as proof to avail of the LTA exemption.

Example
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1.An employee is eligible for an LTA of Rs.24,000 annually for the financial year 2002 2003. In the current block 2002 - 2005, he/she has carried forward one trip from the previous block. The employee submits the travel tickets of Rs.26,000 for the journey undertaken between the January 2, 2002 - January 19, 2002. The employee gets an exemption of Rs.24,000, which is the minimum of the eligible LTA and the travel tickets submitted as proof. This exemption is against the carry forward trip from the previous block. 2.An employee is eligible for an LTA of Rs.36,000 annually for the financial year 2002 2003. In the current block 2002 - 2005, he/she has carried forward one trip from the previous block. The employee submits the travel tickets of Rs.20,000 for the journey undertaken between the January 2, 2002 - January 19, 2002. He/she also submits another set of travel tickets of Rs.15,000 for the journey undertaken between April 10, 2002 - April 28, 2002. The employee gets an exemption of Rs.35,000, which is the minimum of the eligible LTA and the total amount (Rs.20,000+Rs.15,000) of the travel tickets submitted as proof. This exemption is against the carry forward trip from the previous block and one trip of the current block.

See also: Defining Exemption on Leave Travel Allowance (LTA) Exemptions infotype (0582) LTA subtype

Exemption on Medical Reimbursement


Purpose
This component calculates the tax exemptions against Medical Reimbursements. You can give Medical Reimbursements to your employees in the following ways:
...

By specifying an annual (normally, but not necessarily) amount for Medical Reimbursement and making payments against claims submitted by the employee. By giving the employee a certain amount as medical allowance on a monthly or a periodic basis. For further information on Medical Reimbursements, see the Claims section.

Integration
Whenever an employee submits the bills for medical exemption as proof, you must create an Exemptions infotype (0582), MDA subtype record for the employee. You can create a record for each bill submitted by the employee or you can create a record by cumulating all the bills, submitted as proof for medical exemption. You can make the payments for Medical Reimbursement through the Basic Pay infotype (0008), Recur. Payments/Deds. infotype (0014), Additional Payments infotype (0015) or Additional OffCycle Payments infotype (0267). Payroll functions WPBP, P0014, P0015 and P0267 read the Basic Pay infotype (0008), Recur. Payments/Deds. infotype (0014), Additional Payments infotype (0015) and Additional Off-Cycle Payments infotype (0267), respectively for Medical Reimbursements and populates the Input Table with Medical Reimbursement and Medical Reimbursement to be treated as Medical

Insurance wage types. The system stores the Medical Exemption that is brought forward from the previous employer in the Input Table against the Previous Employment Medical Exemption wage type (/4V6). Medical reimbursement payroll function (INMED) reads the Exemptions infotype (0582), MDA subtype record, the Input Table and the Cumulative Results Table, and generates the Medical Reimbursement Exemption wage type (/3M1).

Features
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1. Medical Reimbursement is tax exempt up to a maximum limit as per the Income Tax Act.

To configure this maximum limit go to the IMG under Payroll India Tax tax Liability on reimbursements, Allowances and Perks Assign Tax Code limits to Wage types. details of the declaration are populated in the Exemptions infotype (0582), MDA subtype. Total Medical Reimbursement payments made for the financial year through Basic Pay infotype (0008), Recur. Payments/Deds. infotype (0014), Additional Payments infotype (0015) or Additional Off-Cycle Payments infotype (0267). Total amount of medical bills submitted as proofs and entered in the Exemptions infotype (0582), MDA subtype. Maximum limit of the exemption against Medical Reimbursements as configured in point 1, above. You must populate the Exemptions infotype (0582), MDA subtype with the details of the medical bills submitted as proofs to avail of the medical exemption on Medical Reimbursements. You have been provided with an option, whereby, you can ignore the entries in the Exemptions infotype (0582), MDA subtype, by sending a parameter, X, to the Medical reimbursement payroll function (INMED). In such a case, exemption on Medical Reimbursement is the lesser of a and c, above.

2. The employee has to submit the medical bills as proofs to avail of the tax exemption. The
3. Exemption against Medical Reimbursement is the minimum of:
...

1. An employee may be allowed to claim Medical Insurance premium against the Medical Reimbursement limit set by the employer. Hence, for the purpose of claim, this Medical Insurance premium amount is treated as Medical Reimbursement. But for the purpose of taxation, this amount is treated as Medical Insurance premium. To give this benefit to an employee, you must:
...

Select the indicator for Medical Insurance Exemption in the Exemptions infotype (0582), MDA subtype record in which you enter the details of this proof. Enter the constant 1, as the Assignment Number in the Additional Payments infotype (0015) record through which you make the payment for this claim.

Example
The tax exemption limit for Medical Reimbursement is Rs.15,000. An employee is eligible to a medical allowance of Rs.20,000 and he or she submits proofs of Rs.10,000 for the financial year. In this case, the employee gets a tax exemption of Rs.10,000, which is the minimum of the above three amounts. See also: Medical Reimbursement Definition Medical Exemption Incremental Medical Perk Medical Insurance Exemptions infotype (0582) MDA subtype

Exemption on Medical Insurance Premium


Purpose
This component calculates the tax exemptions against Medical Insurance premiums. You can provide Medical Insurance to your employees in the following ways:
...

By specifying an annual amount for Medical Insurance and making payments against claims submitted by the employee. By giving the employees a certain amount as Medical Insurance allowance on a monthly or a periodic basis.

Integration
Whenever an employee submits a bill for medical premium as proof, you must create an Exemptions infotype (0582), MDA subtype record for the employee. You can disburse the payments for Medical Insurance through the Basic Pay infotype (0008), Recur. Payments/Deds. infotype (0014), Additional Payments infotype (0015) or Additional OffCycle Payments infotype (0267). The To read infotype 0582 payroll function (P0582) reads the Exemptions infotype (0582), MDA subtype record and populates the details in internal table EXM. Payroll functions WPBP, P0014 and P0015 read the Basic Pay infotype (0008), Recur. Payments/Deds. infotype (0014) and Additional Payments infotype (0015), respectively and populates the internal table. Medical reimbursement payroll function (INMED) reads EXM and the internal table and generates the Medical Insurance wage type (/3M2). Payroll functions WPBP, P0014 and P0015 read the Basic Pay infotype (0008), Recur. Payments/Deds. infotype (0014) and Additional Payments infotype (0015), respectively for Medical Insurance premium payments and populates the Input Table with Medical Insurance and Medical Reimbursement to be treated as Medical Insurance wage types. Medical reimbursement payroll function (INMED) reads the Exemptions infotype (0582), MDA subtype record, the Input Table and the Cumulative Results Table, and generates the Medical Insurance Exemption wage type (/3M2).

Features
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1. Reimbursement of premiums, paid by the employee, for the Medical Insurance policy on the health of the employee or his or her family members is tax exempt.

2. The employee must submit the Medical Insurance premium bills as proof to avail of the tax
exemption. You must enter the bill date, exemption amount and select the dependents for whom the bills are submitted, in the Exemptions infotype (0582), MDA subtype. You must select the indicator for Medical Insurance Exemption in this infotype record. Total Medical Insurance payments made for the financial year through Basic Pay infotype (0008), Recur. Payments/Deds. infotype (0014), Additional Payments infotype (0015) or Additional Off-Cycle Payments infotype (0267). Total amount of the Medical Insurance premium bills submitted as proof and entered in the Exemptions infotype (0582), MDA subtype. 1. The reimbursement of Medical Insurance premium does not form part of the Gross Taxable Income of the employee. If the employee has claimed, as Medical Insurance premium, an amount that is greater than the bills submitted as proof, the excess amount is added to the Gross Taxable Income.

1. Exemption against Medical Insurance is the lower of:


...

You have been provided with an option, whereby, you can ignore the entries in the Exemptions infotype (0582), MDA subtype, by sending a parameter, X, to the Medical reimbursement payroll function (INMED). In such a case, exemption on Medical Insurance is the total Medical Insurance payments made for the financial year. 1. An employee may be allowed to claim Medical Insurance premium against the Medical Reimbursement limit set by the employer. But for the purpose of taxation, this amount is treated as Medical Insurance premium. To give this benefit to an employee, you must
...

Select the indicator for Medical Insurance Exemption in the Exemptions infotype (0582), MDA subtype record in which you enter the details of this bill. Enter the constant, 1, as the Assignment Number in the Additional Payments infotype (0015) record, through which you make the payment for this claim.

Example
An employee is eligible to a Medical Insurance allowance of Rs.20,000 and he or she submits Medical Insurance premium bills as proof of Rs.16,000 for the financial year. In this case, Rs.4,000 is added to the Gross Taxable Income of the employee. See also: Medical Insurance Definition Medical Exemption Medical Reimbursement Exemptions infotype (0582) MDA subtype Claims

Exemption on Child Education Allowance/Child Hostel Allowance


Purpose
This component calculates the tax exemption on Child Education Allowance (CEA) and Child Hostel Allowance (CHA).

Integration
The Children Education Allowance exemption payroll function (INCEA) can generate the following wage types depending on the parameter setting:
/4CE Monthly exemption on education of children /4CH Monthly exemption on hostel accommodation of children /4E1 Annual exemption on education of children /4E2 Annual exemption on hostel accommodation of children Parameter Setting EAA Description Consider Exemptions infotype (0582), subtypes SCEA and SCHA entries on an annual basis and treat the components as an allowance, Wage Types Generated /4E1, /4E2

that is, the components are projected for the financial year to arrive at the annual exemption. EAR Consider Exemptions infotype (0582), subtypes SCEA and SCHA entries on an annual basis and treat the components as a reimbursement, that is, only year-to-date values are considered to arrive at the annual exemption. Consider Exemptions infotype (0582), subtypes SCEA and SCHA entries on a monthly basis and treat the components as an allowance, that is, the components are projected for the financial year to arrive at the annual exemption. Consider Exemptions infotype (0582), subtypes CEA and CHA entries on a monthly basis and treat the components as a reimbursement, that is, only year-to-date values are considered to arrive at the annual exemption. Ignore Exemptions infotype (0582), subtypes SCEA and SCHA entries and treat the components as an allowance, that is, the components are projected for the financial year to arrive at the annual exemption. Ignore Exemptions infotype (0582), subtypes SCEA and SCHA entries and treat the components as a reimbursement, that is, only year-to-date values are considered to arrive at the annual exemption. /4E1, /4E2

EMA

/4CE, /4CH, /4E1, /4E2

EMR

/4CE, /4CH, /4E1, /4E2

XOA

/4E1, /4E2

XOR

/4E1, /4E2

' '

Default parameter
Ignore Exemptions infotype (0582), subtypes SCEA and SCHA entries and treat the components as an allowance,

/4CE, /4CH, /4E1, /4E2

that is, the components are projected for the financial year to arrive at the annual exemption.

Features
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1.The number of children eligible for the tax exemption on CEA and CHA is the lesser of:
...

Number of children entered and declared as eligible for the allowance component in Family/Related Person infotype (0021) subtype 2. Maximum number of children, for whom the exemption can be availed on the allowance component, as per the Income Tax Act. This number is stored in the No children exmpt for CEA/CHA constant (NOCHL) of table view Payroll Constants (V_T511K). 1.A fixed amount of CEA and CHA are tax exempt for a child per month, as per the Income Tax Act. To configure this maximum limit, go to the IMG under Payroll India Tax Tax Liability on Reimbursements, Allowances and Perks Assign Tax Code Limits to Wagetypes. 2.The employee has to submit the expenditure as proof to avail of the tax exemption. The details of the declaration are populated in the Exemptions infotype (0582), CEA and CHA subtypes. 3.Exemption against CEA and CHA is the minimum of:
...

Total CEA and CHA payments made for the month or the financial year through Basic Pay infotype (0008), Recur. Payments/Deds. infotype (0014), Additional Payments infotype (0015) orOne-Time Payments Off-Cycle infotype (0267). Total expenditure submitted as proofs and entered in the Exemptions infotype (0582), SCEA and SCHA subtypes. Number of children eligible for the exemption multiplied by the amount per child fixed by the government for each of the two components, respectively. In this case, the exemption amount will be the number in point 1 multplied by the amount in point 2, above. You have been provided with an option, whereby, you can ignore the entries in the Exemptions infotype (0582), SCEA and SCHA subtypes, by sending a parameter to the Children Education Allowance exemption payroll function (INCEA). In such a case, exemption on Child Education and Child Hostel Allowances is the lesser of a and c, above. 1.The CEA Annual Exemption wage type (/4E1) and CHA Annual Exemption wage type (/4E2) are calculated by projecting the CEA Monthly Exemption wage type (/4CE) and CHA Monthly Exemption wage type (/4CH) respectively. 2.The annual projection of Child Education and Child Hostel Allowances is limited to the earlier of:

End of the financial year End Date of the Family/Related Person infotype (0021) subtype 2 record. See also: Defining Exemptions on Child Education/Child Hostel Allowances Exemptions infotype (0582) SCEA/SCHA subtypes

Exemption on Other Allowances and Reimbursements


Purpose
This component is used to calculate tax exemption on any allowance or reimbursement that your company may want to give to the employees. You must use this component only: For those tax exemptions that have not been provided as a standard by the system. For example, Exemptions on Leave Travel Allowance, Medical Reimbursement, Medical Insurance, Child Education Allowance, Child Hostel Allowance. When the tax exemption is not a fixed amount and varies from one employee to the other depending on the proof of expenditure provided by the employee.

Integration
The General Payroll function for Allowance/Reimbursement Treatment payroll function (INCTX) calculates the tax exemption on any allowance or reimbursement that you may want to give to your employees.

1. The system reads the Basic Pay infotype (0008), Recur. Payments/Deds. infotype (0014)
or Additional Payments infotype (0015) for the payments made for the allowance or reimbursement. created by you through table view Subtype Characteristics (V_T591A).

1. The system reads the exemption amount from the subtype of Exemptions infotype (0582),

Features
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1. When the employee submits the proof of expenditure, you must enter the amount in the
subtype created by you for Exemptions infotype (0582). 2. Exemption on the allowance or the reimbursement is the minimum of:
...

Allowance or reimbursement made through the Basic Pay infotype (0008), Recur. Payments/Deds. infotype (0014) or Additional Payments infotype (0015). Total amount of exemption entered in the subtype created by you for Exemptions infotype (0582). Maximum limit of exemption maintained in table view Taxability of Wage Types (V_T7INT9). See also: Exemption on Other Allowances and Reimbursements Configuration

Leave Encashment
Purpose
This component computes exemptions on the Leave Encashment received by an employee at the time of separation from employment. The system computes exemption on Leave Encashment as the minimum of:
1. 2. Leave Encashment Amount Exemption limit

3. 4.

Product of the Average Monthly Salary and the Multiplication factor Product of Average Monthly Salary and Number of months of leave encashed

For more information, see Exemptions on Leave Encashment

Integration
Termination Workbench This functionality computes the Leave Encashment amount for the employee. 1. Income Tax The exemption on Leave Encashment is reported by the Income Tax functionality under Section 10 Exemptions.

Previous Employment Tax Details Infotype (0580) If an employee has claimed an exemption on Leave Encashment in a previous employment, you can capture the exemption amount in this infotype. The system will deduct this claimed amount from the maximum exemption limit, and then compute the current exemption.

Exemption on Voluntary Retirement Scheme


Purpose
This process describes the computation of the exemptions, on the amount received by an employee under a Voluntary Retirement Scheme (VRS).

Process Flow
Voluntary Retirement Service Taxationpayroll function (INVRS) computes exemptions on the VRS at the time of termination. It computes the exemption on VRS as a minimum of the following factors:
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1. VRS payments received 2. Tax limit 3. Number of months of salary payable for every completed year of service 4. Product of the Number of months of Salary from VRS date to Normal Retirement Date and the Current nominal basis VRS payments received

Gratuity contribution taxationpayroll function (INGTX) checks the internal table IT for the VRS wage type and obtains the amount received as VRS Payment. The Termination Workbench computes the amount payable as VRS and stores the wage type for VRS in the Additional Payments infotype (0015). You can also directly enter the VRS amount in the Additional Payments infotype (0015).
...

1. During payroll processing in the termination period, the Processing request for additional payments payroll function (P0015) reads the Additional Payments infotype (0015) and stores the wage type for VRS in the internal table. 2. Before checking the internal table for the VRS wage type and amount, the Voluntary Retirement Service Taxation payroll function (INVRS) checks the table view Taxability of wage types (V_T7INT9) for the VRS tax code, SVRS and the wage type that is associated with this tax code. Voluntary Retirement wage type (MVR0) is the model wage type that is associated with tax code SVRS. After identifying the VRS wage type, associated with the tax code SVRS, the Voluntary Retirement Service Taxation payroll function (INVRS) looks for this VRS wage type in the internal table and obtains the VRS payment amount.

To identify the tax code for VRS and the VRS wage types associated with the tax code, the Voluntary Retirement Service Taxation payroll function (INVRS) checks the table view Taxability of wage types (V_T7INT9). It also determines the eligibility for VRS through Pay Scale Grouping for Allowances from the table view Reimbursement Allowances Perks - eligibility and calculation (V_T7INA9). Ensure that you have configured the eligibility wage type (MVR0) as Cessation Payment in the table view Reimbursement Allowances Perks eligibility and calculation (V_T7INA9). Cessation Payment is an option under the Reimbursement/ allowance/perk indicator.

Tax limit
...

1. Voluntary Retirement Service Taxation payroll function (INVRS) checks for the maximum amount of VRS that can be exempt from tax. The maximum limit is as specified by the authorities. You can view the maximum limit for the tax code SVRS using the table view Taxability of wage types (V_T7INT9). 2. If the employee received an exemption on the VRS amount from a previous employment, Voluntary Retirement Service Taxation payroll function (INVRS) will not process an exemption on VRS in the current employment. You can maintain the VRS exemption, claimed in a previous employment using the Previous Employment Tax Details infotype (0580). The VRS Exemption wage type (/4V9) stores the exemption amount previously claimed. Number of months of salary for every completed year of service

The number of months of salary for every completed year of service is computed as the product of 1, 2 and 3:
...

1. No. of years of continuous service The Termination Workbench calculates the number of years of service based on the employment Start Date and End Date. In the Termination Workbench, you have the option of overwriting the value computed by the Termination Workbench. You can also make the payment on VRS through the Additional Payments infotype (0015). 2. Multiplication Factor for VRS The Multiplication factor is a predefined number of months of salary, taken for each year of service. The Month Factor Pre VRS Service constant (MFPVR) of table view Payroll

Constants (V_T511K) stores the Multiplication factor for VRS and as of year 2001-2002, the value of the factor is three. 3. Latest Nominal basis The system takes the Basic and Dearness Allowance components of an employee's salary as the VRS basis. The Voluntary Retirement Bas. wage type (/129) stores this computed VRS basis amount. The Nominal Cumulations rule (IN72) checks the Basic and Dearness Allowance wage types for the Processing Class 72 and cumulates them into the Voluntary Retirement Bas. wage type (/129). The Voluntary Retirement Service Taxation payroll function (INVRS) takes the last nominal basis as the current nominal basis and for obtaining the same, it makes use of the Last nominal basis rule (INLN). Product of the Number of months of Salary from VRS date to Normal Retirement Date and the current nominal basis

The system computes the remaining period of service by taking the difference between the: 1. Date of actual termination 2. Date on which the employee would have normally retired, if the employee had not opted for the VRS
Voluntary Retirement Service Taxation payroll function (INVRS) computes the value by dividing the remaining number of days by 30.5 and then rounding off the value to the nearest lower integer. You can create and maintain the date of normal retirement in the Date Specifications infotype (0041). Ensure that you select the Date Type as N0.

After selecting the minimum of the four exemption factors, the Voluntary Retirement Service Taxation payroll function (INVRS) generates the Voluntary Ret. Exemption wage type (/4E6), in which it stores the exemption on VRS.

Voluntary Retirement Service Taxation payroll function (INVRS) computes exemption on VRS only when at least one of the following conditions applies:

1. The employee has completed 10 years of service in the company. The Min Age for VRS exemption constant (VRSYR) of table view Payroll Constant (V_T511K) stores the value for the number of years in service. 2. The employee has reached the age of 40.
The Determine VRS Eligibility rule (INVR) performs the check for these two conditions, and processes the Voluntary Retirement Service Taxation payroll function (INVRS) only when the employee meets at least one of the two conditions.

Retroactive Computation
Voluntary Retirement Service Taxation payroll function (INVRS) computes exemption on VRS only in the month of termination.

Result
When you process payroll for the employee in a period after termination, the system will import the VRS exemption results from the termination period into the period under consideration. The Processing the last results table payroll function (PLRT) makes use of the B/F Termination related exemptions for Payroll after termination rule (INTT) to import the results. The rule checks the Last Results Table (LRT) for the VRS wage type and imports them into the current period. The system does not make any changes in the imported results.

Previous Employment Tax Details


Purpose
This component provides for the computation of:
Tax in the current financial year, by capturing the salary, exemption, contribution, deduction details of the employee pertaining to the previous employments in the current financial year. Tax exemption when the employee separates from the current employment, by capturing certain lifetime exemptions from all previous employers.

Integration
You must create a Previous Employment Tax Details infotype (0580) record

For an employee, whenever a new employee joins your organisation For all employees who have joined your organisation in the past from some other employment, when you are going live with the SAP System.

The Previous Employment Tax Details payroll function (P0580) reads the Previous Employment Tax Details infotype (0580) and populates the details in the internal table PET.

The value entered as the number of times the employee has claimed LTA exemptions, gets stored in the PET internal table as LTAEX field. This LTAEX field indicates the number of times the employee has claimed LTA Exemption with his previous employers for the current block of four years. When you create an Exemptions infotype (0582) LTA subtype record for an employee, the system will check the LTAEX field to see if the employee has claimed an LTA Exemption for this block of four years in his or her previous employment. The indicator for whether the employee has carried forward an LTA claim from the previous block of four years, gets stored in the PET internal table as a checkbox. This indicates whether an LTA Exemption has been carried forward for the employee from the previous block of four years pertaining to his or her previous employers. If you create an Exemptions infotype (0582) LTA subtype record for an employee in the first year of the new block of four years, the system will check the PET internal table to see if the checkbox has been selected or not.

If the checkbox has been selected, the exemption granted will be against the carried forward LTA Exemption from the previous block of four years.
Previous Employment Tax Details payroll function (INPET) processes the internal table PET and generates the following wage types:
...

1. Prev Gross salarywage type (/4V1) - This wage type stores the amount entered as the salary as per provisions under section 17(1). The amount in Prev Gross salary wage type (/4V1) is added to the current Gross Salary wage type (/416). 2. Val of perk u/s 17(2)wage type (/4VJ) - This wage type stores the amount entered as the value of perquisites under section 17(2). The amount in Val of perk u/s 17(2) wage type (/4VJ) is added to the currentGross Salary wage type (/416). 3. Profts wrt sal u/s 17(3) wage type (/4VK) - This wage type stores the amount entered as the profits in lieu of salary under section 17(3). The amount in Profts wrt sal u/s 17(3) wage type (/4VK) is added to the current Gross Salary wage type (/416). 4. Prev exemp u/s10wage type (/4V2) - This wage type stores the amount entered as the exemptions under section 10. The amount in Prev exemp u/s10 wage type (/4V2) is added to the current Section 10 exemption wage type (/130). 5. Prev prof. tax paidwage type (/4V3) - This wage type stores the amount entered as the Professional Tax. The amount in Prev prof. tax paid wage type (/4V3) is added to the Professional Tax annual deduction wage type (/422). 6. Prev PF contributedwage type (/4V4) - This wage type stores the amount entered as the Provident Fund. The amount in Prev PF contributed wage type (/4V4) is added to the Annual Provident Fund contribution wage type (/3F6). 7. Prev Tax Deductedwage type (/4V5) - This wage type stores the amount entered as the total Income Tax paid by the employee. The amount in Prev Tax Deducted wage type (/4V5) is added to the Total tax deducted so far wage type (/456). 8. Prev Medical Exemptwage type (/4V6) - This wage type stores the amount entered as the medical exemption claimed by the employee. The amount in Prev Medical Exempt wage type (/4V6) is added to the Medical Reimbursement wage type (/414). 9. Leave Encashment Exemtwage type (/4V7) - This wage type stores the amount entered as the sum of all leave encashment exemptions availed. Leave Encashment Exemt wage type (/4V7) gets processed only on the event of the separation of the employee from your organisation. The value of this wage type gets deducted from the maximum exemption limit for leave encashment exemption. 10.Gratuity Exemptionwage type (/4V8) - This wage type stores the amount entered as the total gratuity availed. Gratuity Exemption wage type (/4V8)

gets processed only on the event of the separation of the employee from your organisation. The value of this wage type gets deducted from the maximum exemption limit for gratuity exemption amount. 11.VRS Exemption wage type (/4V9) - This wage type stores the amount entered as the Voluntary Retirement Scheme (VRS) exemption amount availed. VRS Exemption wage type (/4V9) gets processed only on the event of the separation of the employee from your organisation. No tax exemption is given, in case the employee has availed of the same with any of the previous employers. 12.Prev Employment Edu Cess wage type (/4PE) - This wage type stores the value of education cess deducted for the financial year at previous place of employment. Previous Employment Tax Details payroll function (INPET) reads the value of Edu Cess Deducted field in Previous Employment Tax Details infotype (0580) to generate this wage type. HR-IN: India Income Tax computations payroll function (INTAX) reads the value of this wage type and adds it to the value of Edu Cess Ded Till Date wage type (/4TE) to generate the Monthly Edu Cess wage type (/4ME). 13.Prev Employment Surcharge wage type (/4PS) - This wage type stores the value of surcharge deducted for the financial year at previous place of employment. Previous Employment Tax Details payroll function (INPET) reads the value of Surcharge Deducted field in Previous Employment Tax Details infotype (0580) to generate this wage type. HR-IN: India Income Tax computations payroll function (INTAX) reads the value of this wage type and adds it to value of Surcharge Ded Till Date wage type (/4TS) to generate the Monthly Surcharge wage type (/4MS). 14.Prev Emp Tax Payablewage type (/4PT) - This wage type stores the value of tax payable deducted for the financial year at previous place of employment. Previous Employment Tax Details payroll function (INPET) reads the values of Income Tax Deducted, Education Cess Deducted and Surcharge Deducted fields in Previous Employment Tax Details infotype (0580) to generate this wage type. HR-IN: India Income Tax computations payroll function (INTAX) reads the value of this wage type and adds it to the value of Tax Payable Ded Till Date wage type (/4TT) to generate the Monthly Tax Payable wage type (/4MT). See also: Previous Employment Tax Details infotype (0580)

Professional Tax
Purpose
This component provides functions and processes that compute the professional tax deductions of an employee. Professional tax is a statutory tax that state governments levy

on professions, trades, callings, and employment. Professional Tax functionality in the SAP system, only covers the Professional Tax applicable on employee salaries. Individual State Governments decide the rules applicable for computing the professional tax in their state. The Central Government, under the Constitution of India, fixes the limit on professional tax that the State Governments can charge.

Integration
Income Tax The system estimates the annual professional tax of an employee and deducts it from salary as per Section 16(ii) of the Income Tax Act.

Features
The system determines the professional tax payable by an employee, based on the following factors:
Professional tax basis Comprises those salary components on which a professional tax is applicable. The salary components to be included for calculating the professional tax basis depend on the state. The different components are:

Basic pay Dearness allowance Medical reimbursement perquisite Housing Profits in lieu of salary Other remuneration that an employee receives regularly Bonus
Medical Reimbursement The system includes the medical reimbursement amount which exceeds the amount exempt from Income Tax (as fixed under the Income Tax Act), as a part of the professional tax basis. Housing Allowance In case of a company leased or a company owned accommodation, the system checks the difference in housing allowance and the rent. If you pay an employee the positive difference between housing allowance and rent, then, the system includes this amount for calculating the professional tax basis. Bonus - If the employment is in a state that specifies bonus as a component of the professional tax basis, then the system includes the same for professional tax basis calculations. 1.Basis type This is the type of basis considered while computing professional tax. Basis type can be:

Nominal basis The system considers the salary of an employee, while calculating professional tax. It does not take into account the actual number of days that the employee attended work within the given payroll period. Due basis The system considers the actual amount that an employee receives as the basis amount for professional tax calculations. Most states specify Due basis for professional tax calculations. You can configure this for individual states.
1.Computation frequency This is the frequency with which the system computes professional tax basis for an employee. The computation frequency may span across one or more payroll periods, and the state specifies the frequency. For example, the frequency may be:

Monthly Where the professional tax basis computation occurs every month.

Half yearly Where the professional tax basis computation occurs twice in a year, and each computation spans six payroll periods. Annual Where the professional tax basis computation occurs only once in a year and the computation spans the twelve payroll periods.
1.Deduction frequency This is the frequency with which the system deducts the professional tax of an employee. The computation frequency may span across one or more payroll periods, and is state specific. For example, the deduction frequency may be:

Monthly Professional tax is deducted every month. Quarterly Professional tax is deducted once in a quarter and spans three payroll periods. Half-yearly Professional tax is deducted twice a year, and the computation spans six payroll periods. Annual Professional tax is deducted once in a year, and the computation spans the twelve payroll periods.
1.Exemptions Some states exempt certain categories of employees from paying professional tax. For example, in Karnataka, the following categories of employees are exempt from professional tax:

Blind, deaf or dumb employees Employees who are 65 years of age


1.Professional tax slabs Employee salaries fall within different salary ranges or slabs, and the amount of professional tax to be paid depends on the salary range to which the employee belongs. Every state specifies its own salary slabs and the professional tax rate that is applicable for a salary range. The system calculates the professional tax amount accordingly. 1.Arrears or the retrospective professional tax When arrears are paid to an employee, the system determines the professional tax amount to be paid for previous periods by performing retrospective calculation. The system computes the retrospective professional tax in two ways, and the method it uses depends on the state. The two methods are:

Gross Carry Forward The system recalculates the professional tax basis for the past periods. It carries forward the difference in the professional tax basis for each retrospective calculation period into the current processing period, and sums it up into the current processing period. Deduction Carry Forward The system recalculates the professional tax amount for the past periods. It carries forward the difference in the professional tax amount for every retrospective period into the current processing period, and then sums it up for the current processing period.
When there is a retrospective change of state, or a change in the professional tax liability of an employee, the system always uses the deduction carry forward method for retrospective professional tax computations. 1.Reports The system generates professional tax statements in a format prescribed by the concerned state authorities. In some states, you need to pay tax as per the state act, but submit the returns at the local municipality or corporation level. The system generates the professional tax statements accordingly.

See also: Professional Tax Computation Defining Professional Tax Professional Tax Report (HINCPTX0) Other Statutory Deductions Infotype (0588), Subtype (0003)

Provident Fund
Purpose
This component helps you create and maintain information on employee Provident Fund. Provident Fund is a statutory contribution, and consists of two parts: 1. Provident Fund (PF) - Both, the employee and the employer, contribute a fixed percentage of the PF basis towards a Provident Fund. The minimum percentage contributed is as specified by the authorities. 2. Pension Fund - The employer contributes a fixed percentage of the PF basis towards the Pension Fund of an employee. The minimum percentage contributed is as specified by the authorities.
In addition to contributing towards PF and Pension Funds of the employee, an employer also contributes to the Employee's Deposit Linked Insurance (EDLI). An employee may choose to contribute a certain percentage towards a Voluntary Provident Fund (VPF) Using the Provident Fund component you can create, maintain, process the following for your employees:

PF Pension Fund EDLI VPF

Integration
The Income Tax functionality refers to the wage types of the PF component (annual values) while processing rebates under Section 88.

Features
Trusts and Trust Types You maintain the PF and the Pension funds of the employee(s) in PF and Pension Fund trusts. In the SAP system, you can categorize these trusts as belonging to one of the following Trust Types:

Excluded Trust - In this case the system will process the entire PF contribution of the employer and employee towards the trust. The system will not compute EDLI, EDLI Administration charges, or Pension Fund contribution. Regional Provident Fund Commissioner (RPFC) - In this case, the system will process all the contributions (PF, Pension, EDLI) towards a Government trust.

Exempted Trust - In this case, the system will process the EDLI, EDLI Administration charges and Pension Fund contribution towards a Government trust. The PF contribution will however, be processed towards a trust other than the RPFC

To configure the different types of trusts and the contribution percentages towards the different PF components, go to the IMG under Payroll India Statutory Social Contributions Provident Fund. Provident Fund Contribution infotype (0587) You can maintain the PF details for an employee using this infotype. You can maintain details such as the:

11 Basis for Employee contribution 11 Basis for Employer Contribution 11 Trust ID of the PF and Pension Fund trusts, in which your company maintains employee PF 11 VPF amount 11 Employee Identification Number in the PF and Pension Fund Trusts
Reports You can generate annual and monthly reports for both PF and Pension Fund contributions. Provident Fund

11 Use the Employees' Provident Fund - Reports (HINCEPF0) generate the following monthly PF forms: 11 Form 5 - You can generate this for employee(s) who qualify for the PF, Pension Fund and EDLI membership for the first time. 11 Form 10 - You can generate this report for employees leaving the service, or leaving the PF trust for which you are generating the report, in the current payroll period. 11 Form 12A - This report is a monthly report on the wages paid and recoveries made in the current payroll period, as the Employee and Employer's contribution. 11 Use the PF Report (HINCEPF1) to generate the following annual PF forms: 11 Form 3A - Use this report to obtain a statement on the PF contributions made towards Un-exempted establishments. This is an annual report. 11 Form 6A - This report provides consolidated contribution statement for the financial year.
Pension Fund

11 The PF reports( for exempted trust ) Report (HINCEPN0) to generates the following monthly Pension Fund forms: 11 Form 4 - This report provides details of employee(s) joining the Pension Fund trust during the current payroll period.

11 Form 5- You can generate this report for employees leaving the service, or leaving the Pension Fund trust, for which you are generating the report, in the current payroll period. 11 Form 6 - Use this report to obtain information on the contribution made by the employer, in the current payroll period. 11 Use the Pension Reports (HINCEPN1) to generate the following annual Pension Fund forms: 11 Form 7 (PS) - Use this report to obtain information on the employee(s) who qualified for membership to the Employee Pension Fund. 11 Form 7 (FPF) - Use this report to obtain information on the employee(s) who qualified for membership to the Family Pension Fund. 11 Form 8 (PS) - This report provides consolidated information on the contribution made by employees towards the Pension Fund. 11 Form 8 (FPF) - This report provides consolidated information on the contribution made by employees towards the Family Pension Fund. 1. To generate the Monthly reports on Employee PF and Employee Pension Fund contribution from the SAP Easy Access, choose Human Resources Payroll Asia/Pacific India Subsequent Activities Per Payroll Period Legal Reports. 2. To generate the Annual reports on Employee PF and Employee Pension Fund contribution from the SAP Easy Access, choose Human Resources Payroll Asia/Pacific India Subsequent Activities Annual Legal Reports.
User Exits

11 When an employee joins mid-month or if there was a loss of pay for an employee, the system by default will prorate the Employer Pension Basis. You can override this prorating of the employer Pension Basis by maintaining the EXIT_HINCALC0_002 User Exit in Enhancement HRINCEPF. To access the same in the IMG, choose Payroll India Statutory Social Contribution Provident Fund Override Employer Pension Basis. 11 The standard SAP system follows a Deduction Carry Forward method for retroactive PF processing. If you want the system to perform the retroactive PF computations by the Gross Carry Forward method, you can do using the EXIT_HINCALC0_007 User Exit in the Enchancement HRINCGCF.

To access the same in the IMG, choose Payroll India StatutorySocial Contribution Provident Fund User Exit: Computation of PF by Gross Carry Forward Method. 11 The Annual PF Report (HINCEPF1) and Annual Pension Report (HINCEPN1) display data from March of the previous financial year to February of the current financial year. If however, your company went live with the SAP system in April, you will need to upload the PF and Pension Fund data for March. To upload legacy data for the Annual PF Report (HINCEPF1), use the HR_IN_PF_REP_MARCH Business Add-in GET_MARCH_DATA Method. To upload legacy data for the Annual Pension Report (HINCEPN1), use the HR_IN_PF_REP_MARCH Business Add-in GET_MARCH_DATA_PEN Method. To access them in the IMG, choose Payroll India Statutory Social Contribution Provident Fund Add-In: March Data Upload for Annual PF/ Pension Report See also: Defining Provident Fund Processing Provident Fund

Employee State Insurance


Purpose
This component calculates the Employee State Insurance (ESI) contribution:
To be deducted from the salary of the employee. To be made by the employer.

Eligibility
An employee is eligible for ESI only if:

Other Statutory Deductions infotype (0588) subtype ESI (0001) record exists for the employee. ESI Basis of the employee is less than or equal to the amount stored in the ESI Eligibility Limit constant (ESILT) of the table view Payroll Constants (V_T511P). This amount is set by the government.
ESI Basis is the sum of basic salary, dearness allowance, all allowances and overtime. Overtime is excluded from ESI Basis for the calculation of ESI eligibility but is included for the computation of ESI contribution. 1.If the average wage per day of the employee is less than or equal to the amount stored in the Min.Avg.Wage per day constant (ESIMN) of the table view Payroll Constants (V_T511P), the system calculates only an employer ESI contribution of 4.75% of the ESI Basis.

Average wage per day for an employee is ESI Basis Nominal wage type (/113) divided by the value in the No.of days in month for calc constant (DYSMN) of table view Payroll Constants (V_T511K). 1.If the employee is eligible for ESI in any one month of the ESI contribution period, then the employee is eligible for all the subsequent months in that contribution period.

Integration
Employees' State Insurance Contribution India payroll function (P0588) reads the Input Table P0588 and updates the Input Table ESI. Employees' State Insurance Contribution India payroll function (P0588) determines the following:
1.Number of ESI days - Reads the Other Statutory Deductions infotype (0588) subtype ESI (001). 1.ESI Grouping of the employee - Reads the table view Personnel area/subarea Grouping for Employees' State Insurance (V_7IN0P_ESI). 1.ESI contribution percentages - Reads the table view Employees' State Insurance Contribution Rates (V_T7INE3).

Employees' State Insurance Contributionspayroll function (INESI) reads the Input Table and ESI, and updates the Input Table. This function:
1.Reads the following wage types:

ESI Basis wage type (/112) - This is the actual ESI basis. This includes loss of pay and overtime. This wage type is calculated by the Gross input and storage rule (X023). Based on the specification of Processing Class 20 and if the Cumulation Class 12 of the wage type is selected, the Gross input and storage rule (X023) includes the value of the wage type in the ESI Basis wage type (/112). ESI Basis Nominalwage type (/113) - This wage type does not take into account loss of pay or overtime. Eligibility for ESI is calculated on the amount in this wage type. This wage type is calculated by the Nominal Cumulations rule (IN72). Based on the specification of Processing Class 72, the Nominal Cumulations rule (IN72) includes the value of the wage type in the ESI Basis Nominal wage type (/113).
1.Generates the following wage types:

In case of an original payroll run Actual ESI Basis wage type (/3EA) - This is the effective ESI basis, on which the ESI contributions are calculated.
/3EA = (Amount in /112) multiplied by (Number of ESI days) divided by (Number of Calendar days). The system reads the Number of ESI days from the Other Statutory Deductions infotype (0588) subtype ESI (0001). If the number of days for which an employee is eligible for ESI is same as the number of calendar days in a period, Actual ESI Basis wage type (/3EA) will be same as ESI Basis wage type (/112).

Ee ESI contribution wage type (/3E1) - This is the employee ESI contribution calculated on Actual ESI Basis wage type (/3EA).

Er ESI contribution wage type (/3E2) - This is the employer ESI contribution calculated on Actual ESI Basis wage type (/3EA). 11 In case of a retroactive payroll run CF ESI basis wage type (/AEA) - This is the difference in the values of Actual ESI Basis wage type (/3EA) for the retrospective run and previous payroll run. BF ESI basis wage type (/ZEA) - This is the cumulation of the values of all the CF ESI basis wage types (/AEA) generated during a retrospective payroll run. This wage type is generated during an original payroll run. Ee ESI Refund-Monthly wage type (/AER) - This is the refund amount for the retrospective period. If there is retrospective deletion of Other Statutory Deductions infotype (0588) subtype ESI (0001) record during a retrospective payroll run, there may be a refund of ESI contribution made by the employee. Ee ESI Refund-Total wage type (/ZER) - This is the cumulated values of all the Ee ESI Refund-Monthly wage types (/AER) generated during a retrospective payroll run. The value of this wage type is brought forward to the current payroll period for a refund.

Features
The ESI contribution periods with their respective benefit periods Contribution Period April 1 - September 30 October 1 - March 31 Benefit Period January 1 - June 30 July 1 - December 31

1.Employee makes a contribution of 1.75% of the ESI Basis. 1.Employer makes a contribution of 4.75% of the ESI Basis. 1.You have been provided with a user exit EXIT_HINCALC0_001, in the enhancement HRINCLWF, if you want to change the ESI Grouping for an employee. You can configure this user exit in the IMG under Payroll India Statutory Social Contribution Employees' State Insurance User Exit: Determine Personnel Subarea Grp for ESI and LWF.

See also: Employee State Insurance Set Up Retroactive Employee State Insurance Calculation Form 6 and 7 for Employees' State Insurance report (HINCESI0) Other Statutory Deductions infotype (0588) subtype ESI (0001)

Labour Welfare Fund


Purpose
This component computes the contribution towards Labour Welfare Fund (LWF). LWF is a statutory contribution. The state authorities determine the rate of contribution and frequency of contribution towards LWF.

Features
1. Other Statutory Deductions infotype (0588), LWF (Labour Welfare Fund) subtype (0002)
In this infotype, you select the eligibility of an employee towards LWF such as the LWF frequency, LWF computation rates and the Validity date.

1. Labour Welfare Fund legal reports (HINCLWFI)


Using this report you can generate the LWF form for submission to the authorities. The SAP system generates the LWF statements in the format prescribed by the concerned state authority. 1. LWF Computations The states specify their individual rates for LWF computation, the frequency of LWF contribution and Validity Date for LWF contributions. For example, the LWF contribution frequency in Tamil Nadu is annual and it takes place in the ninth period. The validity date for Tamil Nadu is 31st December. In Kerala, the deduction frequency is bi-annual, and it takes place in the third period and the ninth period. The third period has the validity date as 30th June. You can configure details through the IMGunder Payroll India Statutory Social Contribution Labour Welfare Fund. 2. Termination The method of computing LWF in case of a termination differs from one state to another. The individual states also specify the method of computing LWF contributions, in case of a termination. For example, if an employee in Kerala leaves the organization before 30th June, the system will not compute the LWF contribution for the employee. In the case of Tamil Nadu however, the system will compute the LWF contribution even if the employee leaves before the 31st December. 1. Retrospective LWF calculations A retrospective change in Other Statutory Deductions infotype (0588), LWF (Labour Welfare Fund) subtype 0002 does not result in retroactive LWF calculations. 2. User Exit In the Standard SAP system, you can define the Labour Welfare Groups for the employees based on their default Personnel Area and Personnel Subarea. If you wish to override the default LWF Personnel Subarea grouping, you can do so through a customer exit. For more information, see the IMGunder Payroll India Statutory Social Contribution Labour Welfare Fund User Exit: Determine Personnel SubArea Grp for ESI and LWF.

Nominations Infotype (0591)


Definition
This infotype stores the nomination details of employees for the following benefits:
Employee State Insurance Gratuity Maternity Act Provident Fund

Pension

Use
According to the company rules and legal laws, an employee has to nominate some person(s) for the transfer of benefits, in the eventuality of the death of the employee. These nomination details are maintained in this infotype. The nomination details have to be maintained: 1. 2. 3. 1. When the employee joins the organization. As and when the employee is covered under one of the above benefits. When the employee wants to change the nomination details.

Structure
You are provided with the following subtypes to store the nomination details for the different benefits:

ESI Benefit (BNES) Gratuity Benefit (BNGR) Maternity Act Benefit (BNMB) PF Benefit (BNPF) Pension Benefit (BNPN)
For a subtype,

1.

You must enter the name of the nominee and the percentage of the benefit that goes to the nominee. The sum of the percentage share must be equal to 100.

Minimum Net Pay


Purpose
This component sets a minimum wage for the employees, while processing payroll. Minimum net processing supports only non-statutory deductions.

Implementation Considerations
The deductions, which need to be considered for minimum net processing, should be configured for Priorities and Arrears. You can do this in the IMG under Payroll India Deductions Arrears and Priorities .

Features
The minimum wage for an employee can be configured in two ways:

As a percentage of a particular wage component - You can maintain the percentage in the Minimum Net Pay - Percentage constant (MNPPR) of table view Payroll Constants (V_T511K). By default the particular wage component is taken as the Total gross amount wage type (/101).

As a fixed amount - You can maintain this fixed amount in the Minimum net pay - Fixed Amount constant (MNPAM) of table view Payroll Constants (V_T511P).

You must configure the Minimum Net Pay - Percentage constant (MNPPR) and/or the Minimum net pay - Fixed Amount constant (MNPAM) in the IMG under Payroll India Deductions Minimum Net Pay Maintain Value for Determination of Minimum Wage. If you maintain both of the above mentioned constants, the amount in the Minimum net pay - Fixed Amount constant (MNPAM) is taken as the minimum wage. You have been provided with a Business Add-In (Add-In), HR_IN_MINIMUM_NET. You can use this Add-In to calculate the minimum wage of an employee according to your own requirements, that differ from the standards. For example, you want to configure the minimum wage as a percentage of a particular wage component. In this case, you can set the particular wage component through this Add-In. You must configure the Business Add-In, HR_IN_MINIMUM_NET , through the IMG under Payroll India Deductions Minimum Net Pay Add-In: Minimum Net Pay Value.

See also: Arrears Processing for Deductions

Recovery of Rounded Off Amounts


Purpose
This component:
Rounds off the Net Pay wage type (/560) to a suitable denomination as configured by you. Recovers the rounded off amounts from the Net Pay wage type (/560).

Features
1. The Rounding off & recovery of rounded amt payroll function (INROR) generates the following wage types:

Recovery of round off amt wage type (/ROR) - This wage type stores the rounded off amounts of Net Pay wage type (/560) for a payroll period. The system generates this wage type during every payroll run including an off-cycle payroll run. The cumulated values for this wage type, stored in the Cumulative Results Table, depends on the cumulation settings in table view Cumulation of Wage Types (V_T54C3).

11 Rounding off adjustment wage type (/ROA) - This wage type stores the recovery of the rounded off amounts. You have been provided with four types of recovery options: Monthly

The system generates the Rounding off adjustment wage type (/ROA) during each of the regular payroll runs. Annual The system generates the Rounding off adjustment wage type (/ROA) in the first regular payroll run of the subsequent financial year. Calendar Year The system generates the Rounding off adjustment wage type (/ROA) in the first regular payroll run of the subsequent calendar year. Indefinite The system does not generate any Rounding off adjustment wage type (/ROA). No recovery The system does not round off the Net Pay wage type (/560).

The system does not generate the Rounding off adjustment wage type (/ROA) during an off-cycle payroll run. The system generates this wage type in an offcycle payroll run only when the recovery option in the table view Recovery of rounding off amounts (V_T7INY1) is changed since the previous payroll run.
1. During a retrospective payroll run, the Recovery of rounded amount rule (INRR) brings forward the Rounding off adjustment wage type (/ROA) and the Recovery of round off amt wage type (/ROR) to the current period Results Table. The system subtracts the value of the Rounding off adjustment wage type (/ROA) from the Net Pay wage type (/560). That is,

1.

Net Pay wage type (/560) = Net Pay wage type (/560) Rounding off adjustment wage type (/ROA)
The system then rounds off the Net Pay wage type (/560) to a suitable denomination as configured by you, to generate the Recovery of round off amt wage type (/ROR).

See also: Recovery of Rounded Off Amounts Setup

Loans Enhancement - India


Purpose
This component explains the additional Company Loans features for Payroll India.

Features
Modifications to the Loans infotype (0045) The following options have been added as conditions of the Loans infotype (0045) for India:

Tranche Penal Interest Simulation

1.Reports

Loans Summary report (HINCLON1) Batch Program for Penal Interest (Loans) report (HINILON0)
1.Business Add-Ins (Add-In)

HR_IN_LOANS_VALIDATE 11 HR_IN_PENAL_INTEREST
1.Calculate Interest Rate Advantage as Perquisite Interest Rate Advantage on Company Loans as Perkpayroll function (INLON) calculates Interest Rate Advantage, if applicable, on all loan types for the employees for whom you are processing the payroll.

For a loan type, you can configure Loan Conditions such as: The Debit and Reference Interest Rates 11 Whether the system should calculate the Interest Rate Advantage To configure this, go to the IMG under Payroll India Company Loans Master Data Create Loan Conditions. 11 If you have configured the system to calculate the Interest Rate Advantage, Interest Rate Advantage on Company Loans as Perk payroll function (INLON) calculates this Interest Rate Advantage. 11 You can configure the Taxation of interest rate advantage rule (INJ2) for this Interest Rate Advantage to cumulate in: Loan-Int. Rate adv Taxed wage type (/3J1), if you want the Interest Rate Advantage to be taxed. The value of Loan-Int. Rate adv Taxed wage type (/3J1) is then cumulated in Annual Perk wage type (/127). 11 Loan-Int. Rt adv notTaxed wage type (/3J2), if you do not want the Interest Rate Advantage to be taxed. To configure this rule, go to the IMG under Payroll India Company Loans Calculation Interest Rate Advantage Taxation.

See also: Loans

One Day Salary Deduction


Purpose
This component allows voluntary salary deduction for an employee for one or more days. This component also computes the employer contribution for the same amount as that contributed by the employee.

One day salary deduction is required in situations such as, contribution to Prime Minister's Relief Fund, Charitable Cause.

Features
For a Pay Scale Grouping for Allowances, you can maintain the following details for one day salary deduction:
1. 2. Year and Period in which to calculate the salary deduction Calculation Indicator, which could be any one of the following:

11 11 11 11

Nominal Salary/Calendar Days Nominal Salary/Working Days Actual Salary/Calendar Days Actual Salary/Working Days

1DSD Basis Actual wage type (/137) - This is the actual salary for One Day Salary Deduction. This includes loss of pay and overtime. This wage type is calculated by the Gross input and storage rule (X023) of Monthly factoring and storage (cumul.of gross amount) schema (INAL). If the Cumulation Class 37 of any wage type is selected, the Gross input and storage rule (X023) cumulates the value of the wage type in 1DSD Basis Actual wage type (/137). 1DSD Basis Nominal wage type (/136) - This is the nominal salary for One Day Salary Deduction. This wage type does not take into account loss of pay or overtime. This wage type is calculated by the Nominal Cumulation for 1 day salary deduction rule (IN77) of Monthly factoring and storage (cumul.of gross amount) schema (INAL). For the Processing Class 77 of any wage type, if the Specification is set to 1, the Nominal Cumulation for 1 day salary deduction rule (IN77) cumulates the value of the wage type in 1DSD Basis Nominal wage type (/136). The ASOLL and KSOLL fields of the WPBP Internal Table determine, for an employee, the number of working days and calendar days respectively. 1. 2. Factor, which is the number of days of salary that has to be deducted. This factor can be one, less than one or more than one. Whether the employer contributes the same amount as that contributed by the employee, or not

You can maintain all this through the IMG under Payroll India One Day Salary Deduction Maintain Details for One Day Salary Deduction.

See also: One Day Salary Deduction Calculation

Mid Year Go Live


Purpose
This component helps in transferring legacy payroll results data to the SAP system and in creating payroll results from the transferred legacy data. Mid Year Go-Live functionality is useful if you are implementing SAP Payroll India in the middle of a financial year. In India, the income tax assessment year is from the 1st April to the 31st March and you calculate all applicable taxes on employee salary for this period. When you implement SAP Payroll India in the middle of a financial year, you also need to transfer payroll results for those periods of the financial year that lie before the period, in which you are implementing the SAP Payroll India.
Pre-go-live: This term refers to the periods, for which payroll results are available in the legacy system and need to be transferred to SAP system. Go-live: This term refers to the period, in which you process the first productive payroll run.

Features
Using the Mid Year Go Live functionality, you can upload the final payroll results from your legacy data systems into the SAP system. The final payroll results are the actual payments and deductions of an employee salary. They must include statutory, non-statutory deductions (including third party deductions), arrears and the contributions of the employer. For transferring your legacy data and uploading the same into the SAP system, you are provided with the:

HR Template - Payroll.xls (Microsoft Excel) file, containing templates that drive the data load programs, for converting the legacy data. Data load program(HINUULK0 ) that facilitates the transfer of data into the SAP system. It loads the data saved in the spreadsheet into the Payroll Account Transfer: Payroll Periods table (T558B) and Payroll Account Transfer: Old Wage Types table (T558C) in the SAP system. These are the data conversion tables for the Mid Year Go Live functionality. Standard executableschema (INLK) that formats the uploaded legacy data, into SAP Payroll Period results and stores the results in relevant payroll cluster tables.

Constraints
For retrospective calculation of payments and deductions, the earliest date that you can set is the start date of the period, in which you are processing the first productive payroll run. You can however, manually capture any adjustments for the past periods in specific wage types. See also: Transferring Legacy Payroll Results

Transferring Legacy Payroll Results


Purpose
This process describes the method of transferring your legacy payroll results into the SAP system. It discusses the various processes involved in uploading the payroll results into the SAP system, and in converting the data into SAP payroll results. The following are the main stages in the process of transferring the legacy payroll results:
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HR Template - Payroll.xls file, wherein you enter the legacy payroll results. Data transfer INLK Payroll Tables T558B and T558C Upload program (HINUULK0), which reads the payroll results information from the spreadsheet template, and uploads it into the Payroll Account Transfer: Payroll Periods table (T558B) and Payroll Account Transfer: Old Wage Types table (T558C). The system reads these tables for the purpose of payroll conversion. Transfer of payroll account from Table 5558B,C - India schema (INLK), which when run as a part of the payroll program, HINCALCO,
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Reads the payroll conversion tables Payroll Account Transfer: Payroll Periods (T558B) and Payroll Account Transfer: Old Wage Types (T558C) Converts the payroll results stored in these tables into SAP payroll clusters.

Prerequisites
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You have completed the entire configuration, with respect to Payroll India. The Payroll Periods are set up from the earliest hire date to the present. Valid employee records exist for the following infotypes:

Actions infotype (0000) Organizational Assignment infotype (0001) Personal Data infotype (0002) Planned Working Timeinfotype (0007) Basic Pay infotype (0008) Bank Details infotype (0009) Family/ Related Personinfotype (0021) Previous Employment Tax Details infotype (0580) Housing (HRA/CLA/COA) infotype (0581) Exemptions infotype (0582) Car & Conveyanceinfotype (0583) Income from Other Sources infotype (0584) Section 80 Deductionsinfotype (0585) Investment Details (Sec 88) infotype (0586) Provident Fund Contribution infotype (0587) Other Statutory Deductions infotype (0588) Individual Reimbursements infotype (0589) Long Term Reimbursements infotype (0590) These records must exist from the begin date of the first pay period that you are loading into the SAP system. The legacy upload process refers to these infotype records for validation. These validations are date driven and applicable for all the pay periods that you are converting. You must check all of the above mentioned

infotype records for data validity periods. All data must be valid from the first pay period of the employee with the exception of Actions infotype (0000), Organizational Assignment infotype (0001)and Personal Data infotype (0002). In these three infotypes, the date is as per the Hiring action.
The Payroll Control Records are set for retro-calculation only from the go-live date. Hiring of an employee in the SAP system creates the Payroll Status infotype (0003) for that employee. The system updates the Earliest MD Change field of this infotype with the start date of the Actions infotype (0000) record of the employee. If you try to calculate retrospectively, the system attempts a retrospective calculation on the payroll results uploaded from legacy systems, leading to an error in computation. You have generated the payroll periods for all payroll areas, and payroll control records exist for these areas.

Process Flow
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HR Template - Payroll.xls file - In this file you enter payroll results for the pay periods that you want to upload into the SAP system. This spreadsheet template file consists of two worksheets:

Worksheet 558b, where you define the payroll periods for which you are transferring the payroll results. You must define these payroll periods for individual employees. In this sheet you also specify the payroll periods that are for a regular payroll run and those that are for an off cycle payroll run. In this sheet, you indicate the chronological sequence of payroll runs to be loaded for the employee.
It is recommended that you load one payroll area at a time into the payroll conversion tables. Dividing the data into smaller groups can help reduce the processing time, and avoid data entry errors.

Worksheet 558c, where you define the wage types for which you are transferring payroll results. For every payroll period that you define in the 558B, you must create corresponding wage type entries in 558C.
The system validates the wage types against the Wage Type Valuation table (T512W). Therefore, ensure that these wage types exist in the system before starting your legacy payroll results transfer.

When you save your entries, the in built macro in the HR Template - Payroll.xls file saves the two worksheets into separate tab-delimited text files (T558B.txt and T558C.txt). Ensure that you save the file using the Save for transfer option available in the worksheet 558B. 1. When saving text files to your local hard drive, the total path name must not be longer than 128 characters, or the data conversion INLK Payroll Tables T558B and T558C Upload program (HINUULKO), will not be able to read the full path or filename.

2. When you select the Save for transfer option, any data existing earlier in the same file is replaced with the new data that you have inserted. You will not get any message or warning.
Data Load Program (HINUULK0) - This program reads the data saved in the two text (.txt) files T558B.txt and T558C.txt, and uploads them into the SAPconversion tables. It saves the data from the T558B.txt file into the Payroll Account Transfer: Payroll Periods table (T558B) and data from T558C.txt file into the Payroll Account Transfer: Old Wage Types table (T558C). Transfer of payroll account from Table 5558B,C India schema (INLK) - When you run the Payroll Driver HINCALCO with the special results Transfer of payroll account from Table 5558B,C India Schema (INLK), the schema reads the conversion tables for pay period and wage type information, and generates payroll result clusters. The Transfer of payroll account from Table 5558B,C India schema (INLK) utilizes a function TRANS, during the conversion process. This function reads the wage type and payroll period information from the conversion tables, and stores them in the internal tables. The schema then further processes the information to form the payroll results. While creating wage types in the internal tables, the function TRANS, assigns relevant country specific split indicators to the wage types. You, thus, have the flexibility of capturing configurations for Provident Fund, Professional Tax, Employee State Insurance and Labour Welfare Fund, thereby enabling report generation. The rules of the Transfer of payroll account from Table 5558B,C India schema (INLK) are applicable on the standard wage types of the SAP system. You must copy and modify the same for your equivalent wage types.

Once the Transfer of payroll account from Table 5558B,C India schema (INLK) completes the conversion program, it is recommended that you verify the data for accuracy. You can examine data for individual employees using the Cluster Display IN (Payroll Results, India) program (HINCLSTR). If the data is accurate, you may delete the data in the conversion tables, and load the payroll results for the remaining legacy payroll periods. If there are errors in conversion delete the payroll results and re-execute the data load process. For more information, refer to the IMG under Payroll India Legacy Data Transfer.
SAP recommends that you do not use the Transfer of payroll account from Table 5558B,C India schema (INLK), after you have processed a regular payroll run in the SAP system. Post conversion processing

For all employees for whom you have uploaded the payroll results, you must set the following to the Go-Live Date:
1.Earliest Retro Recalculation date Earliest Master Data Change date Earliest Master Data Change Bonus date

Termination Workbench
Purpose
This component helps in terminating an employee from the payroll. The Termination Workbench computes the various types of payments due to, or payable by the employee at the time of termination. For example, Gratuity, Superannuation, Leave Encashment or any pending Reimbursable allowances. The termination of employment may be due to the: Resignation of an employee Retirement of an employee Voluntary retirement or premature retirement by an employee For information on setting up the Termination Workbench functionality in the SAP system, refer to the IMG under Payroll India Termination Workbench.

Integration
1. 2. 3. 4.
Contract Elements infotype (0016) Where you maintain the details of the employment contract, between the company and the employee. Termination Workbench determines the notice period for termination using this infotype. Date Specificationsinfotype (0041) Where you maintain the date of Normal Retirement of the employee. Termination Workbench computes the relief on Voluntary Retirement Service benefit for the employee using the data maintained in this infotype. Personal IDsinfotype (0185) Termination Workbench obtains the Gratuity and Superannuation Trust details for the employee from the infotype. Additional Paymentsinfotype (0015) After the transaction is complete, Termination Workbench updates the payment records in the Additional Payments infotype (0015). The updated amounts are disbursed to the employee through the payroll run, along with other components of the salary. Actions infotype (0000) When an employee is terminated using the Termination Workbench, the Termination Workbench delimits the employee in the Actions infotype (0000).

5.

Features
The Termination Workbench comprises of the following processes: Termination transaction (PC00_M40_TERM)- Using this transaction you can specify the details of employee Gratuity, Superannuation, Leave Encashment, Voluntary Retirement Services and Reimbursable Allowances. The transaction reads the relevant infotypes and determines the amounts payable to the employee. For example, amounts payable as Gratuity, Superannuation, Notice Pay and Leave Encashment. You can modify these amounts using the transaction. When you execute the transaction, it updates the relevant wage types in the Additional Payments infotype (0015). This transaction also creates a batch session for delimiting the infotype records. Batch Input Monitoring transaction (SM35) Using this transaction, you can execute the batch session created by the Termination transaction (PC00_M40_TERM). Upon execution, the batch session delimits the infotypes configured for delimiting, in the infogroup. For more information on configuring the infogroup, refer to the IMG under Payroll India Termination Workbench Define Infogroups. The batch session also delimits the employee in the Actions infotype (0000). You can set the Return Action Type for Termination Workbench feature (40TRM) for the Action Type to

be defaulted in Actions infotype (0000) when the infotype record gets delimited. You can do this in the IMG under Payroll India Termination Create reasons for Personnel Actions. Payroll when you execute the payroll for the period in which the employee was terminated, the payroll processes the amounts payable at the time of termination. For example, Notice Pay, Gratuity, Superannuation and Leave Encashment. The payroll also calculates the applicable exemptions. See also: Termination Workbench Definition Termination Workbench Computations

Gratuity
Purpose
This component is used to process employee gratuity. Gratuity is a statutory benefit provided by an employer on cessation of employee services. In the SAP system, you can configure the payment of Gratuity as per one of the following methods: Payment of Gratuity Act, 1972 Where the minimum amount that you need to contribute towards gratuity is 4.81 percentage of the monthly basis salary of the employee.

Company policy When the company policy provides gratuity benefits that are better than the benefits provided as per the Gratuity Act. Gratuity is generally applicable to employees who have been in service for a minimum stipulated period. The employer regularly contributes towards a gratuity trust, to provide for payment at the time of cessation of services. Gratuity received by an employee is taxable partially.

Integration
Payroll Process Employee gratuity is computed by the system as a part of the regular payroll process. Income Tax As gratuity is taxable partially. Termination Workbench This functionality computes the gratuity payable to an employee at the time of cessation of employment.

Features
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1. Personal IDs infotype (0185), Gratuity for India subtype (03) In this subtype, you maintain the employee Identification Number for Gratuity, and the name of the trust, to which you are contributing for employee gratuity. 2. Gratuity Listing report (HINCGRY0) Using this report you can generate a Gratuity list. This list details an employee wise contribution towards a gratuity trust. See also: Gratuity Definition Gratuity Process

Gratuity Definition
Purpose
This process describes the configurations necessary for the Gratuity functionality.

Prerequisites
You have configured the Pay Scale Grouping for Allowances for the employees. This configuration is required for the system to identify employee eligibility for gratuity. You have configured the wage types that form the Gratuity basis through the table view Processing Classes, Cumulations, and Evaluation Classes (V_512W_D). The Gratuity Basis wage type (/116) stores the basis for gratuity.

Process Flow
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1. Define the trust(s) in which your company maintains employee gratuity amount. You must define the name of the trust, and the Trust ID To do so, go to the IMG under Payroll India Retirement Benefits Maintain Gratuity Trust ID The Personal IDs infotype (0185) Gratuity for India subtype (03), displays options as per the Trust IDs that you have configured in this IMG activity.

The system calculates gratuity as per the Gratuity Act. If the rate of gratuity provided by the company is higher, the system will instead, compute gratuity as per the company rules.
2. Define the types of gratuity contribution and the wage types associated with the different types of gratuity contributions. Contributions to gratuity can be on a monthly or on an annual frequency. For more information, refer to the IMG under Payroll India Retirement Benefits Maintain Gratuity Contrib. Freq. and Related Wage Types. In the IMG activity, you have the option of creating customer specific wage types for gratuity. You can do so by copying the following default wage types:

/3G1 Stores the monthly gratuity contribution /3G2 Stores the annual gratuity contribution /3G3 Stores the sum of splits in the gratuity period

3. Specify the percentage of gratuity basis that the system must use for gratuity computations. To specify the percentage, go to the IMG under Payroll India Retirement Benefits Define Contribution Rates for Gratuity. 4. Specify the minimum number of years that the employee must work in the company, to become eligible for gratuity. To specify the minimum number of years of service criteria, go to the IMG under Payroll India Retirement Benefits Maintain the Eligibility Years for Gratuity. While processing payroll, the system checks the min. no. of years constant (GRTYR), which you maintain using this IMG activity, for eligibility. Configurations for Retrospective Calculation

If you have created customer specific wage types, then you must:
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1. Add the customer specific wage types to the To check whether Gratuity contributions took place rule (INGR). During retrospective calculations, the system either imports or does not import the gratuity wage types from the previous results, based on this rule. To add the wage types to the To check whether Gratuity contributions took place rule (INGR), go to the IMG under Payroll India Retirement Benefits Check for Gratuity Contribution. 2. Add the customer specific wage types to the Passing wage types from ORT to IT for Gratuity Retro rule (IN51). You might have already contributed towards gratuity in the previous payroll run for the period. In this case, you can set a rule that the employer need not contribute again, during the retrospective payroll run. To add the wage types to the Passing wage types from ORT to IT for Gratuity Retro rule (IN51), go to the IMG under Payroll India Retirement Benefits Maintain Wagetypes to be passed during Retro Runs.

Gratuity Process
Purpose
This process describes the gratuity calculations performed by the system during a payroll process.

Prerequisites
You have set the configurations necessary for the functioning of Gratuity in the SAP system: You can configure the functionality using the IMG under Payroll India Retirement Benefits Gratuity. You have maintained employee records in the Personal IDs infotype and Gratuity for India subtype (003). You have configured the wage types that form the basis for gratuity contributions in the table view Processing Classes, Cumulations, and Evaluation Classes (V_512W_D). The Gratuity Basis wage type (/116) stores the gratuity basis amount.

Process Flow
While processing gratuity contributions during a payroll run, the SAP system:
...

1. Checks the eligibility of the employee towards gratuity. Eligibility of the employee towards gratuity is as per the Pay Scale Groupings for Allowances. The system also performs a check on the minimum number of years of service that the employee should have put in, to become eligible for gratuity. The Number of Gratuity years constant (GRTYR) in the table view Payroll Constants (V_T511K), stores the value for the minimum number of years, and the system makes use of the Determine Gratuity eligibility rule (ING0) to read this constant. You can maintain the value in the constant through the IMG under Payroll India Retirement Benefits Maintain the eligibility years for Gratuity.

2. Checks the Type of Contribution (Yearly or monthly) The company may contribute towards Gratuity on a monthly basis, or on an annual basis. You can set the annual contribution towards gratuity to either a financial year or a calendar year. To set the Type of Contribution, use the IMG activity under Payroll India Retirement Benefits Maintain Gratuity Frequency of Contribution and Related Wage Types. 3. Computes the gratuity amount. During computations, the system checks the table view Gratuity Details Maintenance (V_T7ING1) for the value configured, and computes gratuity accordingly. For example, if in the table, you have maintained the gratuity contribution amount as 4.81 percentage of the gratuity basis, the system will compute 4.81 percentage of the gratuity basis, as the employer contribution towards gratuity. Computation of the basis for gratuity depends on the Type of Contribution. If the contribution type is:

Monthly The system will compute gratuity every month, and store the amount in the Grat Contrib -monthly wage type (/3G1). Annual The system will compute gratuity only at the end of the gratuity period. The system can compute the gratuity every month, but will take the amount into consideration only at the end of the gratuity period. The Grat Contrib - annual Wage Type (/3G2) stores the annual gratuity contributions. If there are splits in the gratuity period, the system will create a provisional Grat Prov-split period Wage Type (/3G0), for every split and then store the sum of all the splits in the Grat Prov sum of split wage type (/3G3).

Exemptions on Gratuity
Purpose
This section describes the process followed by the SAP system, while computing exemptions on Gratuity.

Process Flow
Gratuity contribution taxationpayroll function (INGTX), computes the exemptions on the gratuity, received by an employee at the time of termination or retirement. Exemption on gratuity is available in cases of:
Termination Retirement In both termination and retirement, exemption is given on Gratuity in the following cases:

11 Termination/retirement period is the same as the Gratuity payment period 11 Termination/retirement period is before the Gratuity payment period in the same financial year or another financial year. All payments made after termination/retirement are exempted from tax subject to the Gratuity exemption limit.
Exemption on Gratuity is not given in the following cases:

11 Gratuity payment period is before the Termination/retirement period.

11 Termination/retirement period is before the Gratuity payment period but the Gratuity payment is made in a financial year, which is after the termination/retirement year. Also, the payment is made with effect from a period (falling in a year before the financial year), in which the actual payment is made. In this case, Section 89(1) Relief on the Gratuity is given to the employee. For example, the employee was terminated in February 2003. Gratuity payment is made to the employee in June 2004 with effect from March 2003. In this case, the employee does not get Gratuity exemption, instead the employee gets Section 89(1) Relief on the Gratuity payment. Gratuity contribution taxationpayroll function (INGTX) computes the exemption on gratuity as a minimum of the following three factors:
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1.Gratuity payments received 2.Tax limit 3.Number of months of salary for every completed year of service Gratuity payments received

Gratuity contribution taxationpayroll function (INGTX) checks the internal table for the Gratuity wage types and obtains the Gratuity amount. The Termination Workbench computes the Gratuity amount and stores the wage type for Gratuity in the Additional Payments infotype (0015). This wage type stores information on the amount (in the amount field BETRG) and the number of months of gratuity paid (in the number field ANZHL). You can also directly enter the Gratuity amount in the Additional Payments infotype (0015).
During payroll processing, the Processing request for additional payments function (P0015) reads the Additional Payments infotype (0015) and stores the wage type for Gratuity in the internal table (IT). 1.Gratuity payments can be of two types:

As per the gratuity act In this case, Gratuity contribution taxation payroll function (INGTX) checks the internal table for the gratuity wage type that is associated with the tax code SAGA. Gratuity recieved wage type (MPG0) is the model wage type for gratuity payments as per the gratuity act. As per company policy When the gratuity paid by the company is higher than the limits set by the Payment of Gratuity Act. In this case, Gratuity contribution taxation payroll function (INGTX) checks for the gratuity wage type associated with the tax code SNGA. Gratuity received wage type (MPG1) is the model wage type for the gratuity paid as per company policy. To identify the tax codes for gratuity and the gratuity wage types associated with the two tax codes, the Gratuity contribution taxation payroll function (INGTX) checks the table view Taxability of wage types (V_T7INT9). It also determines the eligibility for gratuity through Pay Scale Grouping for Allowances from the table view Reimbursement Allowances Perks - eligibility and calculation

(V_T7INA9). After identifying the wage type, associated with the tax code SNGA or SAGA, the Gratuity contribution taxation payroll function (INGTX) checks for these wage types in the internal table.
Ensure that you have configured the eligibility wage types (MPG0 and MPG1) as Gratuity, in the table view Reimbursement Allowances Perks - eligibility and calculation (V_T7INA9). Gratuity is an option under the Reimbursement/ allowance/perk indicator field.

For more information, see Gratuity.


Tax limit 1.Gratuity contribution taxation payroll function (INGTX) checks for the maximum amount of gratuity that can be exempt from tax. The maximum limit is as specified by the authorities. You can view the tax limit for the tax code SAGA using the table view Taxability of wage types (V_T7INT9). 2.If the employee, in any previous employment, received an exemption on the gratuity amount, the Gratuity contribution taxation payroll function (INGTX) will reduce the maximum limit on exemption by the amount already availed. You can maintain the Gratuity exemption, claimed in a previous employment using the Previous Employment Tax Details infotype (0580). The Gratuity Exemption wage type (/4V8) stores the previous exemption amount. Number of months of salary for every completed year of service 1.Payment as per Gratuity Act In this case, gratuity is computed as the product of:

No. of years of continuous service The termination workbench calculates the number of years of service based on the employment Start Date and End Date. In the Termination Workbench, you have the option of overwriting the value computed by the Termination Workbench. Multiplication Factor for gratuity, which is equal to (K1 * 12) / 1000 K1 is the 1000*Stat Gratuity contrb perc constant (GRYCO), stored in the table view Payroll Constants (V_T511K). This factor is as defined by the Gratuity Act. Latest Nominal Basis Gratuity contribution taxation payroll function (INGTX) takes the last nominal basis as the current nominal basis, and it makes use of the Last nominal basis rule (INLN) to obtain this value.
1.Payment as per Company Policy If the payment of gratuity is as per company policy, the system computes gratuity as the product of:

No. of years of service The system computes this in a manner similar to that for the Payment as per Gratuity Act. Multiplication Factor for gratuity, which is equal to K2, divided by ten. K2 is the constant (GRYTX) in the table view Payroll Constants (V_T511K). The value of this factor can be as per the company policy.

1 Average Monthly Salary 1 The system computes the Average Monthly Salary as the average of the basis salary for a pre-defined number of months, preceding the period of termination or retirement. The Current nominal basis wage type (/129) stores the monthly basis salary for Gratuity.
The No. of months for avg. salary constant (GRAVS) of table view Payroll Constants (V_T511K) stores the pre-defined number of months for computing the Average Monthly Salary. The value is as specified by the authorities.
If basis salary data for the required number of months is not available in the SAP system, you can enter the same through the Additional Payments infotype (0015). Ensure that you pass the wage type for average salary as the first parameter (param 1), to the Gratuity contribution taxation payroll function (INGTX). You can use the model wage type Avg sal pre-instln wage type (MLIN) to create the wage type for average salary.

After selecting the minimum of the three exemption factors, Gratuity contribution taxation payroll function (INGTX) generates the Gratuity Cont. Exemption wage type (/4E8), in which it stores the current exemption on Gratuity.

Result
When you process the payroll for the employee in a period after termination/retirement, the system will import the Gratuity exemption results, from the termination/retirement period into the period under consideration. The Processing the last results table payroll function (PLRT) makes use of the B/F Termination related exemptions for Payroll after termination rule (INTT) to import the results. The rule checks the Last Results Table (LRT) for the gratuity wage types and imports them into the current period. The system does not make any changes in the imported results.

Superannuation
Purpose
This component is used to process Superannuation for an employee. Superannuation is a benefit provided to an employee on cessation of employee services. To give this benefit to an employee, the employer contributes to a Superannuation trust on a monthly or yearly basis. There is no similar contribution from employee. This component does not form a part of the monthly pay slip and is not taxable.

Integration
Payroll Process

Superannuation contributions are computed by the system as a part of the regular payroll process Termination Workbench The Termination Workbench computes the Superannuation payable to an employee at the time of termination of employment. During a regular payroll run, the system computes the Superannuation and stores the results in provisional wage types.

Features
The Superannuation component comprises:
Personal IDs infotype (0185) Superannuation for India subtype (01) In the subtype, you maintain the Identification Number of the employee and the name of the trust, in which you are contributing for Superannuation. Superannuation report (HINCSAN0) Using this report you can generate a Superannauation List. This list gives an employee wise contribution towards a Superannuation trust, for a specified period.

See also: Superannuation Configuration

Superannuation Configuration
Purpose
This process describes the configurations for Superannuation.

Prerequisites
You have configured the Pay Scale Grouping for Allowances for the employees. This configuration is required for the system to identify employee eligibility towards Superannuation. You have configured the wage types that form the basis for Superannuation, in the table view Processing Classes, Cumulations, and Evaluation Classes (V_512W_D). The Superannuation Basis wage type (/117) stores the basis amount for superannuation.

Process Flow
1. 1. Define the trust(s) in which your company maintains the Superannuation amount. You must define the name of the trust, and the Trust ID
To do so, go to the IMG under Payroll India Retirement Benefits Maintain Superannuation Trust ID. The Superannuation ID field of Personal IDs infotype (0185) Superannuation for India subtype (01), displays options as per the Trust IDs that you have configured in this IMG activity.

2.

2. Define the types of contribution for Superannuation, and the wage types associated with the different types of contribution. Contributions to Superannuation can be on a monthly or on an annual frequency.
For more information, refer to the IMG under Payroll India Retirement Benefits Maintain Superannuation Contrib. Freq. and Related Wage Types. In the IMG activity, you have the option of creating customer specific wage types for Superannuation. You can do so by copying the following default wage types:

San Contrib -monthly (/3S1) - Stores the monthly superannuation contribution San Contrib - annual (/3S2) Stores the annual superannuation contribution San Prov - sum of split (/3S3) Stores the sum of splits in the superannuation period 3. 3. Specify the percentage of the Superannuation basis that the system must use for superannuation computations.

To specify the percentage, go to the IMG under Payroll India Retirement Benefits Define Contribution Rates for Superannuation.

4.

4. Specify the criteria under which an employee becomes eligible for Superannuation.
The processing of Superannuation depends on processing of Bonus also. If an employee has received a bonus, you can specify whether the system must calculate superannuation for the employee in the same payroll period. Using the Superannuation processing feature (40SAN), you can configure the criteria under which an employee becomes eligible for superannuation, in case of a bonus payment. You can configure the feature using the IMG under Payroll India Retirement Benefits Maintain Eligibility Details for Superannuation.

Configurations for Retrospective Calculation

If you have configured customer specific wage types in the table view SuperannuationWagetype Details (V_T7INS5), then you must:
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1. Include the customer specific wage types to the To check whether Superannuation contributions took place rule (INSN). During a retrospective calculation, based on this rule, the system either imports or does not import the superannuation wage types from the previous results. To include the wage types to the rule, go to the IMG under Payroll India Retirement Benefits Check for Superannuation Contributions. 2. Include customer specific wage types to the Passing wage types from ORT to IT for Superannuation Retro rule (IN52). You might have already contributed towards superannuation in the previous payroll run for the period. In this case, you can set the rule such that the employer need not contribute again, during the retrospective payroll run. To include customer specific wage types to the rule, go to the IMG under Payroll India Retirement Benefits Maintain Wagetypes to be passed during Retro Runs.

Print Program for Form 24


Use
This function enables you to print, for the selected employees, the following parts of Form 24 and Form 24Q:
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Details of Salary Paid and Tax Deducted thereon from the Employee This part displays the income, deductions and tax details of the selected employees for the financial year. Annexure The annexure displays the particulars of perquisites and amount of accretion to Employee's Provident Fund Account for the financial year. Form 27A (only for Form 24) This is a coversheet for the e-filing of Form 24. This has to be submitted to the tax office in a physical form. An electronic copy of Form 24 has to be submitted by the employer to the tax office before May 31 for the preceding financial year, example, before May 31, 2004 for the financial year 2003 - 2004. If you have implemented the SAP Payroll across a group of companies, and you have employees who have worked in more than one of these companies within a financial year or a quarter, you can list their details for the period of his/her employment in Form 24 or Form 24Q of each of these companies. This happens only when you enable Multiple Form 16. If an employee has been with a Group for discontinuous periods, in the same financial year or a quarter, the employee will be listed in Form 24 or Form 24Q of the Group for each continuous employment with the Group. For example, an employee has been with:

Group 1 of ABC between April 1, 2001 - July 31, 2001 Group 2 of ABC between August 1, 2001 - December 31, 2001 Group 1 of ABC between January 1, 2002 - March 31, 2002
In this case, the employee will be listed twice in the Form 24 of Group 1 and once in the Form 24 of Group 2.

Integration
The report reads the:
1. PAN, TAN and the GIR of the employer through the Feature to return Employer ITax related data (40ECC). To maintain this feature, go to the IMG under Payroll India

Tax Basic Settings Maintain Feature to Return Employer IncomeTax Related Data. 1. PAN/GIR Number of the employee from the Personal Ids infotype (0185) 0002 subtype. 1. Results Table for the income, deductions and tax details of the selected employees, for the financial year.

Prerequisites
For Form 24, you must have the payroll results for all the periods in the financial year, for which, the employees have been with your organization. For Form 24Q, you must have the payroll results for all the periods in the quarter, for which the employees have been with your organization.

Features
1. It is mandatory to enter the Company Code of the employee. 2. If you enter the Personnel Area, Personnel Subarea or Payroll Area, the report reads all records that exist for that Personnel Area, Personnel Subarea or Payroll Area only. 1. For Form 24, you have to enter the financial year for which the report is valid. In the printed report, the Date from which employed during the financial year field displays either the financial year begin date or the date on which the employee joins the organization, whichever is later. The Date upto which employed during the financial year field displays either the financial year end date or the date on which the employee leaves the organization, whichever is earlier. 2. For Form 24Q, you have to enter the financial year and the quarter in that financial year for which the report is valid. In the printed report, the Date from which employed field displays either the quarter begin date or the date on which the employee joins the organization, whichever is later. The Date upto which employed field displays either the quarter end date or the date on which the employee leaves the organization, whichever is earlier. 3. Specify whether you want to generate Form 24 or Form 24Q in the Quarter field. If you want to generate Form 24Q, specify the quarter (1 - 4) for which you want to generate the form. If you want to generate Form 24, leave this field blank. 4. In the Personnel No. of Person Resp. field, you must enter the Personnel Number of a person from your organization. The report reads the master data records of this person for the required details. This person has to sign on the form. 5. If the address of the employer has changed since the last time that the employer has filed tax returns, select the Change in Addr. of Employerindicator. 6. If the address of the person responsible has changed since the last time that the employer has filed tax returns, select the Change in Addr. of Person Resp. indicator. 7. Indicate whether the type of employer filing Form 24 or Form 24Q is a Government organization or not. 8. Enter the Employer Branch/Division. The system prints this on Form 24 or Form 24Q, and Form 27A. 9. Enter the Report Date and the Report Place. The information that you enter is printed on the form. 10. When you run this report, data that is printed under Details of Salary Paid and Tax Deducted thereon from the Employee section of Form 16 is exported to the TemSe file. Print program for form 16 report (HINCF160) reads this data from the TemSe file. Every time you run the Form 24Q report for the same selection, the system updates the existing TemSe file.

1. Select the TemSe File (Test) indicator during the test run of the report. Print Program for Form 16 report (HINCF160) does not read the TemSe file records that are generated during a test run. 2. Do not select TemSe File (Test) indicator during the final run. If you run the report again after the final run, you will get a warning message that the TemSe file record of selected employee for the selected period will be overwritten. You can decide to continue with the run or you can cancel the run.
The naming convention of the TemSe file that is exported is: HR_INaabb_**********. Here, aa = last two digits of the year, bb = quarter (01 - 04) and the 10 *s indicate the system generated sequence number for the TemSe objects. You can see these objects through transaction SP11. 1. You can:

In case of Form 24 and Form 24Q for the last quarter, view the following lists in the ALV format and download them as worksheets: Deductee wise details of TDS Salary and Income Tax Details 1. In case of Form 24Q for the first three quarters, view the Deductee wise details of TDS in the ALV format and download it as worksheet 1. Download e-file for Form 24 and Form 24Q 2. Print Form 27A
1. You are provided with the following Business Add-Ins (BAdI):

HR_IN_ER_ADDRESS This BAdI can be used to determine the name and the address of the employer, which is printed on Form 24 or Form 24Q, based on parameters other than the standard. You can access this BAdI in the IMG under Payroll India Other Reports Form 16 and Form 24 BAdI: Determine Address of Employer Based on Different Parameters. HR_IN_F24Q_TXBL_INCM This BAdI can be used to calculate the monthly Taxable Amount to be printed on Form 24Q. You can access this BAdI in the IMG under Payroll India Other Reports Form 16 and Form 24 BAdI: Calculate Taxable Income of the Employee for Form 24Q Reporting.

Activities
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From SAP Easy Access menu, choose Human Resources Payroll Asia/Pacific India Subsequent Activities Annual Legal Reports Income Tax Form24. The Print Program for Form 24 screen appears. Enter the relevant selection criteria. Enter the Company Code. Enter the User Parameters. Choose Program Execute.

The system lists down the Deductee wise details of TDS for each employee in the different payroll periods. You can select the Salary and Income Tax Details option on the Application tool bar to display the Salary and Income Tax Details of each employee for the last quarter or for the financial year. You can total the different sub components of salary or tax to enter the challan details. You can download the lists mentioned above in the form of worksheets by selecting the Spreadsheet option from the Application tool bar. Choose Challan Details option. Enter the details of the tax paid You can use the details displayed on the screen. The details that you enter are printed on Form 24 and Form 24Q. Save the Challan Details. To print a copy of Form 27A, choose Print Form 27A. To download the electronic copy of Form 24 or Form 24Q, and the Annexure in the form of a text file, choose Download e-File for Form 24. On the selection screen, if you have entered:

1. Annual (blank) as the Quarter, the system downloads Form 24 One of the quarters (1 - 4) as the Quarter, the system downloads Form 24Q

Print Program for Form 16


Use
This function enables you to print for a financial year, for an employee, the following sections of Form No. 16 and Form No. 16AA:
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Details of Salary Paid and Any Other Income and Tax Deducted This section displays the income, deductions and tax details of the employee for the financial year. Details of Tax Deducted and Deposited into Central Government Account This section displays the:

Tax Deducted at Source (TDS) Surcharge Education Cess Total Tax Deposited Cheque/DD No. (if any) BSR Code of Bank Branch Date on Which Tax Deposited Transfer Voucher/Challan Identification Number The two sections mentioned above form the main part of Form 16. The following two reports are also printed along with Form 16:
Annexure to Form No. 16 This report displays, the amounts for the different components of:

Emoluments Paid Perks Income from Other Sources declared by the employee and processed in the payroll runs Exemptions u/s 10

Form No. 12BA

This report is a statement showing particulars of:

Perquisites Other fringe benefits or amenities Profits in lieu of salary A copy of the Form 16 is given to the employee by the employer at the end of the financial year or on termination of the employee. Form No. 16AA contains a Header and a Footer.
Form No. 16AA is printed for employees for whom both of the following conditions are fulfilled:

1. Have an annual income less than INR 150,000 2. Do not have any income from other sources to be processed by the SAP payroll
1. Multiple Form 16 If you have implemented the SAP Payroll across a group of companies, you can issue separate Form 16 to an employee for the period of his or her employment in each of these companies. If you are already live with the SAP Payroll, you can enable Multiple Form 16 from the beginning of the financial year, example, from April 1, 2002. Once you have enabled Multiple Form 16, you should not revert it. If an employee has been with the same group for discontinuous periods in the same financial year, the employee will get a separate Form 16 for each continuous employment with a Group. For example, an employee has been with:

Group 1 of ABC between April 1, 2001 - July 31, 2001 Group 2 of ABC between August 1, 2001 - December 31, 2001 Group 1 of ABC between January 1, 2002 - March 31, 2002.
In this case, the employee will get three separate Form 16, two from Group 1 and one from Group 2.

Integration
The report reads the:
1. PAN/GIR Number of the employee from the Personal Ids infotype (0185) 0002 subtype. 2. PAN Number, TAN and the GIR of the employer through the Feature to return Employer ITax related data (40ECC). To configure this feature, go to the IMG under Payroll India Tax Basic Settings Maintain Feature to Return Employer IncomeTax Related Data. 3. TDS Circle address from the table view Personnel Subarea grouping for Tax (V_T7INT5).

Prerequisites
1. You must have the payroll results for all the periods in the financial year, for which, the employee has been with your organization. 1. You must have defined the Tax Groupings, and assigned a TDS Circleand Payee Key to a Tax Grouping. To do this, go to the IMG under Payroll India Tax Basic Settings Define Personnel Area and Subarea Groupings for Tax.

1. You must have assigned an employee to a Tax Grouping according to his/her Personnel Area and Personnel Subarea. To do this, go to the IMG under Payroll India Tax Basic Settings Assign Tax Groupings for Personnel Areas and Subareas. 2. You must have maintained the Employee Address constant (ADDSS) of table view Payroll Constants (V_T511K). To do this, go to the IMG under Payroll India -> Other Reports -> Form 16 -> Maintain the Addresss to be Printed on Form No. 16AA. 1. To enable Multiple Form 16, you must have implemented the following in all the systems and all the clients:
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In the Implementation Guide for Customizing (IMG), go to General Settings Field Display Characteristics Global Field Display Characteristics Preallocate global field values. Select Payroll India in the Application Component Hierarchy. Create the Global Field for the PIN_MUF16 data element. Set the value of this Global Field to the begin date of the financial year, from which you want to enable Multiple Form 16. For example, you want to enable Multiple Form 16 in your organization from April 1, 2002. In this case, you must set the Global Field Value to 20020401. Once you have activated this Global Field value, you must not revert it. 1. To capture the tax on non-monetary perquisites, if the employer pays this tax on behalf of the employee, you must have implemented the Business Add-In (BAdI), HR_IN_TAX_EMPLOYER. This tax amount is printed on Form 16 under point 16b (Tax paid by the employer on non-monetary perquisites u/s 192(1A) on perquisites u/s 17 (2)). To implement this BAdI, go to the IMGunder Payroll India Other Reports Form 16 and Form 24 BAdI: Tax on Non Monetary Perk Paid by Employer for Form 16 Reporting. 2. To determine the name and address of the employer, which is printed on Form 16, based on parameters other than the standard, you must have implemented the Business Add-In (BAdI), HR_IN_ER_ADDRESS. To implement this BAdI, go to the IMG under Payroll India Other Reports Form 16 and Form 24 BAdI: Determine Address of Employer Based on Different Parameters. 3. You must have executed the Print program for form 24 report (HINCF240). The system reads the TemSe file that is generated by the Form 24Q report to print the data in the Details of Tax Deducted and Deposited into Central Government Account section of Form 16.

Features
1. It is mandatory to enter the Company Code of the employee. 2. If you enter the Personnel Area, Personnel Subarea or Payroll Area, the report reads records for all employees that exist for that Personnel Area, Personnel Subarea or Payroll Area only. 3. You have to enter the financial year for which the report is valid. In the printed report, the From date displays either the financial year begin date or the date on which the employee joins the organization, whichever is later. The To date displays either the financial year end date or the date on which the employee leaves the organization, whichever is earlier. 4. In the Person Responsible field, you must enter the name of a person from your organization. The name of this person will appear at the bottom of the form. This person has to sign against his or her name on the form. 5. If you want Original Document to be printed on the report, select the Original Document indicator.

6. If you do not want to print the form in the layout given by SAP, select Customer Layout and enter the name of the layout created by you. You can create your own layout through transaction SE71. 7. The TemSe files, which are generated by the Print program for form24 report (HINCF240), may not exist for a quarter. You can execute either of the following so that the details are printed in the Details of Tax Deducted and Deposited into Central Government Account section of Form 16:

1. Generate Form 24Q again for the the relevant quarter. In this case, you can leave the File Path field blank. You must not have selected the TemSe File (Test)option on the selection screen of Print program for form24 report (HINCF240) while generating Form 24Q. The Form 16 report does not read the TemSe files that are generated as test runs. 2. Upload the worksheet with the tax data for the relevant quarter. In this case, in the File Path field, enter the path where the file is stored in your local machine. The data in this worksheet is given preference over the data in the TemSe file.
8. If you want the system to print the standard Form No. 16 instead of Form No. 16AA for the employee, select the Execute the Standard Form indicator. 9. You can enter the text to be printed at the footer of the report in the Free text for footer field.

Activities
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From SAP Easy Access menu, choose Human Resources Payroll Asia/Pacific India Subsequent Activities Annual Legal Reports Income Tax Form16. The Print program for Form 16 screen appears. Enter the relevant selection criteria. Enter the Company Code. Enter the Date of Payment and the Bank where tax is deposited details for the 12 regular payroll runs, if required. For details see Tax Deducted and Deposited into Central Government Account. Enter the User Parameters. Enter the Output Format. Enter the Footer Text. Choose Program Execute.

Form 217 (2A) of the Companys Act (HINC2170)


Use
This function displays and prints the salary details of employees whose salary exceeds a specified statutory amount. This is a statutory report, submitted as an annexure to the Director's Report. This report is printed in accordance with the Company's Act.

Integration
This report reads the values of the following constants from the table view Payroll Constants (V_T511P): Annual Salary for sec 217 (2A) constant (SC217) - During the reporting period, if the salary
of an employee (who was employed for the complete duration of the reporting period) exceeds the amount maintained in this constant, the entire salary details of the employee is printed in Form 217 (2A). employed for any part of duration in the reporting period) exceeds the amount maintained in this constant, for one or more months during the reporting period, the salary details of the employee for that period is printed in Form 217 (2A).

Monthly limit for Form 217 (2A) constant (FM217) - If the salary of an employee (who was

You can configure these constants through the IMG under Payroll India Other Reports Form 217 (2A) Maintain Minimum Salary of Employees for 217 (2A) Printing.

This report also reads the Business Add-In, HR_IN_PERCENT_SHARES, for the percentage of shares held by the employees. You can configure this Add-In in the IMG under Payroll India Other Reports Form 217 (2A) Add-In: Percentage Share Held by Employee.

Prerequisites
1. You must have maintained records for the employee in the Organizational Assignment infotype (0001), Personal Data infotype (0002), Contract Elements infotype (0016), Education infotype (0022) Subtype N5 and Other/Previous Employers infotype (0023).


1.

You must configure subtype N5 for the Education infotype (0022). The system reads the latest record of the Other/Previous Employers infotype (0023), in case multiple records exist.

You should have maintained the following fields of the above mentioned infotypes for the corresponding information to be printed on Form 217 (2A): infotype Contract Elements infotype (0016) Education infotype (0022) Subtype N5 Other/Previous Employers infotype (0023) Other/Previous Employers infotype (0023) Field Contract type (CTTYP) Education/training (AYSBI) Job (TAETE) Employer (ARBGB)

Header on Form 217 (2A) Nature of Employment Qualification Previous Employment Job Previous Employment Employer 1.

You must have maintained Evaluation Class 11 of the wage types used in Form 217 (2A) reporting, of which:

Specification 1 should be set for all the wage types that are defined as salary components in Form 217 (2A). Specification 2 should be set for all the wage types that are defined as perquisites in Form 217 (2A).

The total remuneration that is printed on the form is the sum of the values of all wage types with Evaluation Class 11 Specification 1 or 2.

Features
1. You can select the following types of employees:

Full time employees - All employees who are in the payroll throughout the reporting period. Part time employees - All employees who are in the payroll only for a part of the reporting period. 1. The reporting period can be: A financial year ((for example, April - March), or A calendar year (January - December), or A 15 month period

If the reporting period is not a financial year, the perquisite values are prorated on the basis of the actual number of days. For example, the reporting period is January 2002 to December 2002. In this case, the total perquisite value for the reporting period will be the sum of:

1. Perquisite for January 2002 to March 2002, which is the prorated value of the perquisite of the financial year, April 2001 to March 2002 (the system reads the perquisite values from the payroll results of March 2002), and 2. Perquisite for April 2002 to December 2002, which is the prorated value of the perquisite of the financial year, April 2002 to March 2003 (the system reads the perquisite values from the payroll results of December 2002 or the last payroll result, whichever is earlier).

Activities
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1. From SAP Easy Access menu, choose Human Resources Payroll Asia/Pacific India Subsequent Activities Annual Legal Reports Other Reports Form 217 (2A) . The Form 217 (2A) report screen appears. 2. 3. 4. 5.
Enter the employee selection criteria Enter the Company Code Enter the period for which you want to generate the report Select Customer layout to print the report in any layout that you may have created

6. Choose Program Execute The report generates the salary details of all the eligible full time and part time employees

Loans Infotype (0045) - India


Definition
The following options have been added as the Conditions of the Loans infotype (0045) for India:
Tranche/Loan Disbursement Plan 1.Penal Interest Simulation

Use
1.Tranche/Loan Disbursement Plan - You can select this option to display the Proposed Disbursement Plan (as per configuration) of the loan grouping for the employee. When you select this option, the system reads and displays data from the table views Loans Disbursement Schedule (V_T7INJ5) and Loan Tranche Disbursement: Text for Event Codes (V_T7INJ6). 1.Penal Interest Simulation - You can select this option to simulate the Penal Interest Amount for the current period, if you have entered a Special Repayment Amount under the Payments. When you select this option, the system calls the Batch Program for Penal Interest (Loans) report (HINILON0) in the simulation mode, to calculate the Penal Interest Amount for the current period for the employee.

You must have entered and saved the Special Repayment Amount under the Payments of Loans infotype (0045), before selecting the Penal Interest Simulation option. You must have maintained the percentage to be multiplied by the Special Repayment Amount to arrive at the Penal Interest Amount.

Integration
The system conducts the following eligibility checks when you create this infotype:
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Whether the Pay Scale Grouping for Allowances that the employee belongs to is eligible for the loan type that you are assigning to the employee. Whether the age of the employee is less than or equal to the maximum age for that loan grouping. Whether the experience of an employee exceeds the minimum experience for that loan grouping. Whether the maximum number of loans of the selected loan type that an employee can avail at a time is less than or equal to the number for that loan grouping. Whether the maximum number of loans of the selected loan type that an employee can avail for the entire period of his or her service in your organization is less than or equal to the number for that loan grouping.

Whether the total outstanding amount in case of the selected loan type availed by the employee, is less than or equal to the amount for that loan grouping. Whether the maximum number of loans of all types that an employee can avail at a time is less than or equal to the number maintained as a, Max. no. loans allowed at a time constant (LMNL1) of table view Payroll Constants (V_T511K). Refer to point 3 under Loans Configuration for India. Whether the maximum number of loans of all types that an employee can avail for the entire period of his service in your organization is less than or equal to the number maintained as a Max. no. loans allowed constant (LMNL2) of table view Payroll Constants (V_T511K). Refer to point 4 under Loans Configuration for India. Whether the total outstanding amount in case of all types of loans availed by the employee, is less than or equal to the amount maintained as a, Max. amt for loans outstanding constant (LMVAL) of table view Payroll Constants (V_T511P). Refer to point 5 under Loans Configuration for India. Whether the number of months between two loans of the selected loan type is less than the time interval between two loans for that loan grouping. Whether the approved loan amount is less than or equal to the minimum of: Percentage of the Salary Salary is the sum of all salary components (wage types) that you have configured for a Loan Grouping through Determining Salary Components for Loan eligibility feature (40LSL). All these wage types should also be maintained in Basic Pay infotype (0008) record that corresponds to the beginning date of the loans record. Percentage is the value that you have configured in the table view Individual loan eligibility checks and limits (V_T7INJ3). Percentage of the Asset Value To capture the Asset Value, you must configure the GET_ASSET_VALUE Method of the HR_IN_LOANS_VALIDATE Business Add-In (Add-In). Percentage is the value that you have configured in the table view Individual loan eligibility checks and limits (V_T7INJ3). Fixed Amount This is the value that you have configured in the table view Individual loan eligibility checks and limits (V_T7INJ3). If you do not configure the Asset Value through the GET_ASSET_VALUE Method of the HR_IN_LOANS_VALIDATE Business Add-In (Add-In), the system takes the Asset Value to be zero. As such, the loan approval amount becomes zero. In such a case, you can maintain the GET_LOAN_APPROVED Method of the HR_IN_LOANS_VALIDATE Business Add-In (Add-In) to override the loan approval amount computed above.

Loans Enhancement - India


Purpose
This component explains the additional Company Loans features for Payroll India.

Features
Modifications to the Loans infotype (0045) The following options have been added as conditions of the Loans infotype (0045) for India:

Tranche Penal Interest Simulation

1.Reports

Loans Summary report (HINCLON1) Batch Program for Penal Interest (Loans) report (HINILON0)
1.Business Add-Ins (Add-In)

HR_IN_LOANS_VALIDATE 1 1 HR_IN_PENAL_INTEREST
1.Calculate Interest Rate Advantage as Perquisite Interest Rate Advantage on Company Loans as Perkpayroll function (INLON) calculates Interest Rate Advantage, if applicable, on all loan types for the employees for whom you are processing the payroll.

For a loan type, you can configure Loan Conditions such as: The Debit and Reference Interest Rates 11 Whether the system should calculate the Interest Rate Advantage To configure this, go to the IMG under Payroll India Company Loans Master Data Create Loan Conditions. 11 If you have configured the system to calculate the Interest Rate Advantage, Interest Rate Advantage on Company Loans as Perk payroll function (INLON) calculates this Interest Rate Advantage. 11 You can configure the Taxation of interest rate advantage rule (INJ2) for this Interest Rate Advantage to cumulate in: Loan-Int. Rate adv Taxed wage type (/3J1), if you want the Interest Rate Advantage to be taxed. The value of Loan-Int. Rate adv Taxed wage type (/3J1) is then cumulated in Annual Perk wage type (/127). 11 Loan-Int. Rt adv notTaxed wage type (/3J2), if you do not want the Interest Rate Advantage to be taxed. To configure this rule, go to the IMG under Payroll India Company Loans Calculation Interest Rate Advantage Taxation

Loans Configuration for India


Purpose
This process allows you to configure the SAP system for the Company Loans functionality in India.
This configuration is over and above the configurations provided under Loans.

Process Flow
You must make the following configurations for Company Loans in India:
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1. Maintain the Loans Grouping in the IMG for Payroll India Company Loans Master Data Maintain Loans Grouping (40LGR feature).

2. Define the different salary components (wage types) that define the salary for a loan grouping in the IMG for Payroll India Company Loans Master Data Maintain Salary Components (40LSL feature). 3. Maintain the maximum number of loans allowed at a time for an employee in the IMG for Payroll India Company Loans Master Data Maintain Maximum Number of Loans Allowed (LMNL1 constant of V_T511K). 4. Maintain the maximum number of loans that an employee can avail in his or her entire period of employment in your employee in the IMG for Payroll India Company Loans Master Data Maintain Maximum Number of Loans Allowed (LMNL2 constant of V_T511K). 5. Maintain the maximum amount of outstanding loans, of all types, for an employee at any given point of time in the IMG for Payroll India Company Loans Master Data Maintain Maximum amount for loans outstanding (LMVAL constant of V_T511P). 6. Maintain characteristics for a Loan Grouping, such as Employees' Eligibility for a loan, Limit on number of loans taken, in the IMG for Payroll India Company Loans Master Data Maintain Loans Eligibility Checks and Limits (V_T7INJ3). 7. Maintain the disbursement schedule of the loans for a Loan Grouping in the IMG for Payroll India Company Loans Master Data Maintain Loans Disbursement Schedule (V_T7INJ5). 8. Maintain the text for the event codes for a Loan Grouping in the IMG for Payroll India Company Loans Master Data Maintain the Description for the Event Codes Tranche (V_T7INJ6) 9. Maintain the percentage, at company level, to be multiplied by the Special Repayment Amount, stored in the Loans infotype (0045), to arrive at the Penal Interest Amount. To do this, go to the IMG for Payroll India Company Loans Master Data Maintain Penal Amount Percentage for Special Repayment (LONPI constant of V_T511K). 10. Specify whether a Loan Type is eligible for Section 24 Deduction in the IMG for Payroll India Company Loans Master Data Maintain Deduction Details Under Section 24 (V_T7INJ1). 11. Configure the Business Add-In (Add-In), HR_IN_LOANS_VALIDATE, to:
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a. Capture the Asset Value (Method - GET_ASSET_VALUE) A percentage of this Asset Value is then used to determine one of the three parameters for loan approval amount limit. If you do not maintain this value, the system takes the Asset Value to be zero. b. Maintain the loan approval amount for your employees (Method GET_LOAN_APPROVED). The system computes the loan approval amount as the minimum of: i. Percentage of the Salary ii. Percentage of the Asset Value iii. Fixed Amount

Ifyou want to override the loan approval amount computed by the system, you can do so by using this Add-In.
c. Maintain for an employee or a group of employees, the:

Maximum number of loans allowed at a time Maximum number of loans allowed for the entire period of employment Total value of the outstanding loans allowed (Method - GET_LOAN_MAX_VALUES).

The values for all the three mentioned eligibility criteria are maintained in Steps 3, 4 and 5, above. But, if you want to change any of the three eligibility criteria for an employee or a group of employees, you can do so by configuring this AddIn.
To configure this Add-In, go to the IMG under Payroll India Company Loans Master Data Add-In: Loans Eligibility. 12. Configure the Business Add-In (Add-In), HR_IN_PENAL_INTEREST, to calculate the penal interest amount due to foreclosure of a loan. The SAP system provides you with a method to calculate this amount. (See the Batch Program for Penal Interest (Loans) report (HINILON0) for more details.) But you can override this method by using the Add-In. To configure this Add-In, go to the IMG under Payroll India Company Loans Master Data Add-In: Penal Interest Amount. 13. Configure the Taxation of interest rate advantage rule (INJ2) for the taxation of the value of Int.rate adv./curr.month wage type (/LMB) in the IMG under Payroll India Company Loans Calculation Interest Rate Advantage Taxation.

Loans Summary Report (HINCLON1)


Use
This function is used to display the loans status of the employees.

Integration
The system reads the Loans infotype (0045) records of the employees.

Prerequisites
The Loans infotype (0045) record must exist for the employee.

Features
You can enter the following details in the entry screen of the report:
Employee selection criteria - You can select a single or a range of employees 1.Loan Type 1.Evaluation Period

The system displays the following details when you run the report:
1.Employee Number 1.Employee Name 1.Loan Type 2.Sequence Number 3.Principal Latest Month - Principal amount paid by the employee in the last month 4.Principal for the Period - Total principal amount paid by the employee in the entire period selected 5.Interest Latest Month - Interest paid by the employee in the last month 6.Interest for the Period - Interest paid by the employee in the entire period selected 7.Interest Subsidy Latest Month - The amount of interest subsidy that the employee has received in the last month by the employer 8.Interest Subsidy for the Period - The amount of interest subsidy that the employee has received by the employer in the entire period selected

9.Maturity Date - Date on which the employee will pay or has paid the last installment 10. Pre Closure - Pre-closure amounts paid by the employee. This is the sum of the values of the following wage types in the Results Table (if they exist):


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Complete repaymentwage type (/LEX) Special payroll repayment wage type (/LEP) Sp.repayment, external wage type (/LEE)

Activities
From SAP Easy Access menu, choose Human Resources Payroll Asia/Pacific India Utilities Loans Loans Summary Report. The Loans Summary Report screen appears. Enter the relevant selection criteria. In the Loan Details section, Enter a single or a range of Loan Types. Enter the period for which you want the loan status in the Evaluation Period field. Choose Program Execute. The HR-IN: Loan Report output screen appears with the loans details of the selected employees

Subsequent Activities
Purpose
The component comprises the activities that you must carry out after payroll (gross - net payroll).

Wage and Salary Payments in India


Purpose
This component enables you to pay wages and salaries to employees, while taking into consideration country and bank-specific requirements and specifications. Moreover, you can make certain employee-specific payments to third parties (dependent on the country version), whereby the employee is not the payment recipient. The system offers different variants of wage and salary payments, which are used in various combinations by the individual country versions. You can find technical information on wage and salary payments and notes on the necessary Customizing settings in the following sections: Payment-Related Information in the Master Data Payment-Related Information in the Payroll Result Preliminary Program DME

You can find information on the posting of payment transactions in the documentation for Posting to Accounting, under Integration with the Posting of Payment Transactions.

Scope of Function
You can find information on wage and salary payments in the following sections

Payment-Related Information in the Master Data


Certain information from the master data for your employees reappears in the Payroll results. The Wage and Salary Payments evaluates this Information in the Payroll Results, but also accesses certain infotypes directly. Below is a list of the international infotypes that contain payment-related information.
Organizational Assignment (Infotype 0001) Personal Data (Infotype 0002) Addresses (Infotype 0006) Bank Details (Infotype 0009) External Bank Transfers (Infotype 0011)

In addition to the infotypes mentioned above, there are other international wage types (e.g. for capital formation) that contain payment-related information. These infotypes will not be discussed here. For more information on international infotypes, see the SAP Library under Human Resources Payroll <Country>.

For more information on how the system evaluates the payment-related information in the master data and the payroll results, see Preliminary Program DME

Payment-Related Information in the Payroll Results


The following tables in the payroll results contain payment-related information that the system evaluates during the wage and salary payments process.
Payment Information (BT) Work Center/Basic Pay (WPBP)

Payment Information table (BT)


Every entry in the Payment Information table (BT) in an employee's payroll results corresponds to a payment that was created in a payroll period for this employee. However, the employee is not necessarily the payment recipient of all

payments. A difference must be made, for entries in the Payment Information table (BT), between payments to the employee and employee-specific payments to third parties. The origin and treatment of employee-specific payments to third parties is country-specific. If, for example, salary elements for an employee are garnished or are retained for capital formation, an entry is created in the Payment Information table (BT) in the employee's payroll results, for payment of the retained amount to a third party (e.g. the creditor or the capital formation institute). The origin of this entry depends on the county version used, and the settings in Customizing. However, employee-specific payments to third parties do not necessarily create an entry in the Payment Information table (BT) for the employee. The reason for this is that in certain country versions these payments are made independent of the Wage and Salary Payments component.
Entries in the Payment Information Table (BT) for Payments to the Employee The Payment Method field is always filled. The Bank Number and Bank Account fields are filled, if the payment method requires bank details. The Recipient, Postal Code and Location fields are filled, if you have manually overwritten the corresonding fields in the Bank Details infotype (0009). If you have not manually overwritten these fields in the Bank Details infotype (0009), the values from the Personal Data (0002) and Addresses (0006) infotypes are displayed there. In this case, the Recipient, Postal Code and Location fields are not filled in the Payment Information table (BT).

Entries in the Payment Information Table (BT) for Employee-Specific Payments to Third Parties The entry in the Payment Information table (BT) for an employee-specific payment to a third party either contains detailed information from the infotype that forms the basis of the payment (Payment Method, Bank Details, Name and Addresses), or a recipient key in the Recipient field. This recipient key refers to Customizing for Personnel Management, where you must store the detailed information mentioned. The Purpose field in the Payment Information table (BT) is filled, if a purpose was entered in the infotype that forms the basis of the payment.

Note that not all the fields in the Payment Information table (BT) are discussed here. For more information on how the system determines the information on the payment recipient, see Preliminary Program DME, in the "Scope of Function" section.

Work Center/Basic Pay Table (WPBP)


Certain organizational elements from the Organizational Assignment infotype (0001) are stored in the Work Center/Basic Pay table (WPBP) during payroll. These

organizational elements are used in the wage and salary payments process (dependent on Customizing) to determine the house bank and the house bank account. Furthermore, the system uses the Work Center/Basic Pay table (WPBP) to determine the paying company code. Specification of the paying company code is optional in Customizing. If you have not specified a paying company code in Customizing, the system uses the company code that is stored in the Work Center/Basic Pay table (WPBP) in the employee's payroll results. If the Work Center/Basic Pay (WPBP) table for the employee contains several partial periods as the result of a WPBP Split, in the payroll period to be processed, the system uses the company code in the last partial period, in which the employee was active, to determine the paying company code.

Preliminary Program DME


Use
To start the preliminary program DME, from the SAP Easy Access menu choose Human Resources Payroll Payroll Bank Transfer Pre. DME Program. You use the preliminary program DME to evaluate the payroll results to create payment data. The creation of payment data is the first step in the wage and salary payments process. You can also use the preliminary program DME if you want to make several partial payments on different dates within a payroll period ( Qualified Advance Payment). The preliminary program DME can evaluate payments using different payment methods in a payment run. The payment medium programs, which further process the data created by the preliminary program DME, select the relevant data records using the payment method. The preliminary program DME processes both information from the master data and information from the payroll results for an employee.

Integration
The payment data created by the preliminary program DME is processed by the countryspecific payment medium programs in Accounting to create payment mediums (for example, DME files for the bank, checks). You must start these subsequent programs after the preliminary program DME has evaluated the payroll results for the employee and has created the payment data.

Prerequisites
You have exited payroll for the payroll periods for which you want to make wage and salary payments. (Exception: You make a Qualified Advance Payment before exiting payroll.) You have checked or made the following settings in agreement with Accounting.
Setting up the payment methods (in Customizing for Personnel Management under Personnel Administration Personal Data Bank Details Define Payment Method) Setting up the house banks and house bank accounts (in Customizing for Payroll under Data Medium Exchange Preliminary Programs for Data Medium Exchange Set Up House Banks) Defining the Sending Banks (using the Sender Account Number for Data Medium Exchange feature (DTAKT) in Customizing for Payroll under Data Medium Exchange Preliminary Programs for Data Medium Exchange Define Sending Banks) Defining the paying company code if you do not want to use the company code stored in the Organizational Assignment (0001) infotype (using the Sender Account Number for Data Medium Exchange feature (DTAKT) in Customizing for Payroll under Data Medium Exchange Preliminary Programs for Data Medium Exchange Define Sending Banks). Assigning the text key for the payment transaction to transfer wage types (in Customizing for Payroll under Data Medium Exchange Preliminary Programs for Data Medium Exchange Check Text Keys for Payment Transactions) This assignment is not necessary in all country versions.

Features
For every current original result for employees processed in a payment run, the preliminary program DME reads the Payment Information table (BT) in the payroll results. In the process, the system performs the following steps for every entry in this table:
The system determines the information on the payment recipient from the entry in the Payment Information table (BT) from the Payee Keys table (T521B), if the entry in the Payment Information table (BT) contains a recipient key from the Personal Data (0002) and Addresses (0006) infotypes, if the entry in the Payment Information table (BT) does not contain a recipient key and does not contain any recipient data The system evaluates the Sender Account Number for Data Medium Exchange feature (DTAKT) to determine the following information: The paying company code The house bank The house bank account The system reads the Purpose field in the Payment Information table (BT): If the Purpose field is filled, the contents of the field are transferred to the payment data.

If the Purpose field is not filled, the following text is used: "Wage/Salary", <Personnel Number>, <Payroll Period> or "Pension", <Personnel Number>, <Payroll Period>. The system determines the payment currency: If the Currency field in the Payment Information table (BT) contains a currency, this currency is used for the payment. If the Currency field in the Payment Information table (BT) does not contain a currency, the currency from the Currency field in the Payroll Status Information table (VERSC) is used for the payment. The system reads the bank codes of the house bank and the recipient bank from the Bank Master Record table (BNKA). The system checks the payment data for consistency. If a payment with inconsistent data exists for an employee, the system does not perform a payment for this employee. For every entry in the Payment Information table (BT) the system creates an entry in the payment data.

Selection
The selection screen for the preliminary program DME is country-specific. The following describes only the most important international parameters. Set Flag for Transfers We recommend that you mark this indicator. It causes the system to mark every processed entry in the Payment Information table (BT) with date and time, to indicate to payment runs carried out later that they are "processed". This prevents entries in the Payment Information table (BT) being accidentally processed more than once. If the payroll run is repeated after you have executed the preliminary program DME, the system does not overwrite the entries marked with date and time but performs a difference calculation. That is why you must mark the Set Flag for Transfers indicator if you want to perform a qualified advance payment. Wage Type You can use these input fields to restrict a payment run to certain wage types, for example, to pay the wage types created for External bank Transfers (Infotype 0011) separately from the employee's salary. Test If you mark this indicator, the system only displays the payments to be made as the result of a payment run. It does not create any payment data and does not change any data in the payroll results.

Output
The preliminary program DME creates a payment run that contains payment data. You can clearly identify every payment run using a combination of the Program Run Date and

Identification Feature. The Identification Feature originates from the six-digit system time, when you started the preliminary program DME. The system replaces the last digit of the six-digit system time in the Identification Feature with a P.

You started the preliminary program DME at 09.25.12 on 04.14.2000. You can clearly identify the payment run created using a combination of the Program Run Date (04.14.2000) and Identification Feature (09251P).

The payment data contained in a payment run is saved in the following tables:
Control Records for the Payment Program (REGUV) Settlement Data from Payment Program (REGUH) Processed Items from Payment Program (REGUP)

The data in these tables is further processed by the payment medium programs in Accounting. For more information, see Payments (FI-BL). Recent Developments and Legal Changes: Topic Description Note Number

Housing Perquisites

Changes to housing perquisite valuation for Company Owned accommodation as per the deeming 1075933 provisions in Finance Bill 2007. The 1076737 consulting note provides the guidelines to activate this computation.

Monthly GTI and Tax component wage types have been enhanced to take Monthly GTI into account Income Tax in regular run 1021797 and Tax for Arrears and Irregular payments, Recomponents hiring of Employee in the same 1066580 wage types PERNR and the Secondary and Higher Education Cess. Legal changes introduced in the Finance Bill 2007 covering Secondary Budget 2007 and Higher Education Cess and Income 1047524 Tax Slab changes for senior citizen and women. Inclusion of Acknowledgment Number Form 16 1045878 of Form 24Q in Form 16. Income Tax Irregular income such as Bonus and 1024284 on Irregular LTA are currently taxed in the regular

run by considering them as part of total income, and the tax is spread across the year. The payroll computation now Payments supports computation of Income Tax on these components during the regular run instance without spreading the income across the year. Rehiring of an employee on the same employee name (PERNR) is now Rehiring of supported in India Payroll. The Income employee in tax computations take into account the 981544 same employee's previous stint in the PERNR organization during the financial year. Labour Welfare Fund (LWF) contribution in certain Indian States, for example Maharashtra, is based on salary of the employee. The India Labor Payroll solution for LWF is modified Welfare to set up salary slab based contribution 973398 Fund (LWF) rates. This is done through the introduction of a new generic functionality namely Universal Contributions (Payroll Function : INUCD).