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Indian Payroll - LIC Membership Fee_Service Tax

Dear SAP Gurus,

Kindly suggest some solution for the below case related to LIC Membership fee

Requirement: Client is paying LIC premium on behalf of employee and same is been recovering as Membership fee in their every month Payroll. As discussed with client that they wanted to recover the LIC premium amount and Service tax separately and they are paying separately to LIC office.

If we add both service tax and Premium amount in same wage type and recover in Payroll, as per section 88 investments only premium amount is eligible to get the exemption, so we cannot add both the amount and same need to recover separately.

If we recover separately, then we are facing the issue with deduction priorities, if the employee is not having sufficient amount to deduct Premium then system will deduct only service tax amount (i.e employee is having sufficient amount for service tax deduction) and Premium will go for ARRRS, which is not correct i.e without premium amount we are recovering only Service tax amount.

Kindly through some light on the above issue to get the solution.

Former Member
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