HRA Amount Exemption

[Former Member]

Hi

I have a scenario. Whenever i maintain the HRA wagetype in infotype 0008, automatically it has to consider as Exemption like Conveyance.

But here it's not happening.

Hope am clear.

Please let me know the necessary steps.

Thanks & Regards

Bharathi

[Former Member]

Hi Bharathi,

It is best practice to maintain 0581for HRA which automates the Tax calculation and everything.

That is fine some we have to give what the needed if possible

Since you want the way conveyence allowence is getting tax exemption do one thing instead of copying HRA from M230 you just copy the your HRA infotype from conveyence wagetype (primary WT) and check.

Best Regards

[former_member1020143]

Hi Bharati

The HRA exemption is works on the 3 principles/workings. i.e 1 40% of the Basic Salary if the employee working in a Non Metro City, 50% of the Basic Salary 2 Actual HRA what the employee getting from his pay pocket 3 Actual Rent Paid - 10% of the Basic Salary. Compute the 3 principles and take the least value among the 3 workings. The least amount is exemption amount. Subtract the least amount from the HRA which is lying in the employee Pay Pocket. The value comes out of is Taxable HRA amount.

Now I think your doubt got cleared

EKP Yadav

[Former Member]

Hi

Thanks.....its resolved.

Thanks & Regards

Bharathi

[former_member1020143]

Hi Bharati

Regarding taxes or statutory obligations the SAP Works on the rules of the respective authorities.The HRA exemption has not provided to all in the act. To get the exemption on HRA need to maintain the infotype with tick in check box. This is the standard rule framed by the Income Tax Dept. Where as the Conveyance exemption Rs.800/- pm has provided to all who have conveyance /Transport allowance in their pay pocket. It is the rule. For more details pls go to Income Tax India Website.

EKP Yadav

[Former Member]

Hi Yadav,

Thanks for the reply. I have maintained HRA Exemption in 581 infotype.

Actual HRA in infotype 0008 is 2,000 per month and i have maintained 15,000 as HRA Exemption in 581. But the system is taking 24,000 as HRA Exemption(i.e, 2,000*12) instead of 15,000.

Actual amount it's supposed to consider is maximum of 15,000 as per IT rules.

Hope am clear......

Please let me know the changes that need to do.

Thanks & Regards

Bharathi

[Former Member]

any updates pls????

[former_member214675]

Hi Bharathi,

There is no such rule for HRA , whether the maxium HRA tax exempt is 15,000. HRA depend upon basic,Rent etc.

Check it rules for HRA exempt,else ask the core team member(IT expert )whether it calculating correct or not.

Regards,

Prince Elvis

[Former Member]

hi bharti,

i think in the view V_T7INA9 u can restrict it to 15000.

[Former Member]

Hi Raj,

Thanks for the reply. I have maintained the same in V_T7INA9.

And when i select Accomodation Type as "Rented Accomodation" its considering 24,000(2,000*12) from Infotype 0008 and its ignoring 581 infotype. when i select "Company owned", Accomodation type, its neither considering 581 nor Infotype 0008.

Please let me know where am going wrong...

Thanks & Regards

Bharathi

[Former Member]

any inputs pls????

[Former Member]

Hi Bharti,

check ur wagetypes charactoristics.are u using any inval?

[Former Member]

hi bharti ,

try with inval c .

[Former Member]

Dear Bharathi,

HRA Exemption is based on three rules, and it will consider which is least. If you go to Function INHRA documentation explaining clearly or run the test payroll run, drill down up to INHRA and double click the Processing, you will get the full information about the HRA Exemption.

Good Luck

Om.

[former_member214675]

Hi Bharathi,

For Conveyance there is no need to maintain infotype 583.If u maintain in 8 itself it will come under sec 10.

In HRA u have maintain infotype 581 as per my knowledge,because upon rent or cla or coa which we maintained 581,

hra excemption under sec 10 will be calculated based upon that.

Regards,

Prince Elvis

[Former Member]

Hi Prince,

Thanks for the reply. If that is the rule, can i get any document kind of thing in any website or any other links. So that i can forward the same and convience my client.

Hope am clear.....

Thanks & Regards

Bharathi

[former_member214675]

Hi,

Whether u have maintain the record in the infotype 581.if not u have to maintain it.There u have to maintain tick for hra to be tax excempt.

Regards,

Prince Elvis

[Former Member]

Hi Prince,

Thanks for the reply.

My client dont want to maintain in infotype 581. It has to pick automatically from infotype 0008 like Conveyance exemption.

Hope am clear.....

Thanks & Regards

Bharathi

[Former Member]

Hi

Do configure the Processing classes for Taxes. Assign the respective specification against that.

This will solve your problem.

Pl award points.

Regards

Venu

[Former Member]

Hi Venugopal,

Thanks for the reply. I have maintained the p.class as

1-3

3-0

4-6

5-9

6-0

10-1

20-8

30-T

31-0

72-4

and c.class

1,12,1824,38

I have assigned the taxcode SHRA to my HRA wagetype in V_T7INT9

Please chck the above one and kindly let me know changes that need to do.

Thanks & Regards

Bharathi