cancel
Showing results for 
Search instead for 
Did you mean: 

Issue Payroll :Regarding Tax Exemptions

Former Member
0 Kudos

Dear All,

I have created wage types HRA, Travel , Medical allowance in 0008.

Than assigned Tax codes : STLA (Travel Allowance),SMED:Medical Reimbursement,SHRA:House Rent Allowance

in V_T7INT9

wage type tax type frequency exempt it tax code currency

HRA tax exemptions rule based Monthly SHRA inr

Travel tax exemptions rule based Monthly 800 STLA inr

Medical tax exemptions rule based Monthly 1250 SMED inr

than created 0581 Housing (HRA / CLA / COA) Info type:selected Accommodation type:Rented and rent amount 3000 and selected check box HRA to BE Tax Exempt .

Than created Exemptions (582 info type):selected sub type--- MDA Medical allowance

entered Exemption Amount 1250rs/-

selected check box Medical insurance exemption

again selected subtype STLA Travel Allowance-- entered Exemption Amount:800rs/-

than executed payroll .

Now my question where do you check tax exemption for HRA , Medical , Travel Allowance

Which tax wage types will pop up .

How do I find in RT table tax exemption wage types.

How to check the tax.Kindly help me out ...

Thanks

Regards

Nandhini

Accepted Solutions (0)

Answers (2)

Answers (2)

Former Member
0 Kudos

HI,

Convyeance : /3C4 (monthly exemp) , (/4E3 annual)

medi : /3M1

HRA : /4E4 HRA Annual Exemption

Edited by: Consultant SAP HR on May 16, 2011 3:11 PM

Former Member
0 Kudos

Hi ,

V_T7INT9 : i have maintained Limit for tax exemption is monthly 1250 (rs) SMED

than 582 entered april 1st 2010date , Exemption Amoun 15,000.00 INR

is it correct .

when I execute payroll /3m1 and /3m3 is 1250 .

/133 Annual Exemptions :1250 is it correct ....

Than I enter another way like (for testing purpose)

V_T7INT9 : i have maintained Limit for tax exemption is Yearly 15000 (rs) SMED

than 582 entered april 1st 2010date , Exemption Amoun 15,000.00 INR

when I execute payroll /3m1 is 1250 .there is no /3m3.this amount also accumulating .

/133 Annual Exemptions :every month accumulating like when i check on 9th month it s on 11250 rs/-

coming to 12 th payroll its 15000 /-rs

why its not coming /3m3.

kindly advise me how to config for medical allowance .

Regards

Nandhini

Former Member
0 Kudos

/3M1 is for the exemption amount which will consider the amount you have maintained in V_T7INT9.

/3M3 is the medical perk once medical payment will cross the exemption limit maintained.

Now IT0582 is for the Medical proof submitted by the employee.

Also note that you can make the payment either as an allowance or reimbursement.

Now based on the amount you have put for payment and medical proof, exemption amount will be calculated. Hence the second scenario you have explained is correct as V_T7INT9 entry should be annual. For the First time you have configured for monthly exemption and hence it is not working properly.

Former Member
0 Kudos

Thanks for your explanation praveen ,its working fine .

Former Member
0 Kudos

Thanks for your explanation praveen ,its working fine .

Former Member
0 Kudos

N/A

sikindar_a
Active Contributor
0 Kudos

Let me look into it

Former Member
0 Kudos

why its not coming /3m3.

First understand the funcationality of /3m3

Incremental Medical Perk wage type (/3M3) is calculated in thefollowing circumstances:

a) If the Medical Reimbursement is for the first time exceeds the tax Exemption Limit set by the government, the excess amount is treated as Incremental Medical Perk.

b) If the total Medical Reimbursement till date has already exceeded the Tax Exemption Limit in an earlier period of the

current financial year, the Medical Reimbursement in the current period is treated as Incremental Medical Perk.

Your /3m3 is not generating since in IT0582 you have assigned the value i.e. 15000/- that means amount is not exceeding the value that is assigned in V_T7INT9.

Hope you understand now.

Regards,

Former Member
0 Kudos

Hi,

Need your advice :

Medical exemption in SAP is incremental for each month. That means it will reach 15,000 in period 12. Our client wants the medical exemption to be set as 15,000 every month. Is this correct ?

Where can I get write ups from Tax authorities to instruct that medical exemption should be incremental or projected up to year end ?

Appreciate any help rendered.

Thanks++

Former Member
0 Kudos

Hi, any response to this?  I have same requirement:  Medical exemption in SAP is incremental for each month.  That means it will reach 15,000 in period 12.  Our client wants the medical exemption to be set as 15,000 every month.  Is this correct ?  That is, if date of origin in 582 is given as 01.04.2014 with 15000 value, it should be the actual value (i.e. 15000).


Former Member
0 Kudos

Check these 3 wage types in RT table -

/4E4 HRA Annual Exemption

/4E5 LTA Annual Exemption

/3M1 Medical reimbursement

There exemption being generated in the following payroll function INHRA (HRA exemption), INLTA (LTA exemption) and INMED (medical exemption). Now these all will be cumulated into wage type /130 by PCR IN76. All of these payrol function and PCR exist inside subschema 'Gross to Net' (INN1 if you are using standard else customer copy of it).

Also the entry you have made in table V_T7INT9 are incorrect as all these exemptions are annual. I am mentioning the same below -

wage type tax type frequency exempt it tax code currency

HRA tax exemptions rule based 0.00 SHRA inr

Travel tax exemptions limit based Annual 800 STLA inr (as you have mentioned 800 for month so 800*12 = 9600)

Medical tax exemptions limit based Annual 15000 SMED inr (as you have mentioned 1250 for month so 1250*12 = 15000)