North East Tax Exemption is not happening for the Emps whose Basic Changed Retrospectively

[mastan_shaik1]

Dear All,

For few North East State Emps Income Tax is calculating though they are exempt from the Income Tax according to Sec-10 (26 ).

Till the last month there was no Tax calculated for those Emps.

In the current month their basic pay is increased with effect from back date. i.e In the period of Oct for the period of May Basic has been changed.

From this month onwards Income Tax is calculating for the Emps whose Basic Pay was changed with effect from back date. I have checked all the configuration.

1) Maintained 0077 IT

2) NETAX in T511K set as 1

3) 40NET Feature

4) V_7IN0P_All for PA PSA North East Tax Exemption Check Mark.

Still system is calculating Tax for the Emps whose Basic Pay Infotype changed with effect from back date.

Request you all please help me in this regard.

Thanks & Regards,

Mastan Shaik.

[former_member194940]

Dear Mastan, Check table V_T505R for the ethinic group and also make sure the return value for those groups are given in feature 40NET. Let us know if the issues still persists. Thanks, Bhabagrahi

[mastan_shaik1]

Dear Bhabagrahi,

I have maintained/checked all the configuration. Maintained ethnic group also in V_T505R. Given return value for those groups only. This was worked till the last month. From this month onwards Tax is calculating for NE State Emp. Tax is calculating after changing their basic pay infotype with effect from back date. That too this is happening for few Emps those Basic pay has been changed in the current month with effect from back date.

Please Help Me.

Thanks & Regards,

Mastan Shaik.

[venkat_polisetty]

Hi Mastan,

Kindly Check  below SNOTE in your system whether this has been Implemented or not, If not kindly Implement this...

Note Number	1876907
Topic	North East Tax Exemption Changes
Version	1
Valid since	21.06.2013
Reason and Prerequisites	Legal change
Release Status	Released for Customer
Released on	02.07.2013  05:27:18
Priority	Correction with medium priority

Employees of your organization are working in North-East states where Income tax exemption under Section 10(26) is applicable.Mentioned functionality is already enabled in your system but the system is behaving incorrectly in case of some cases. for example consider the following scenarios:

1. ST Employee of any notified NE tribal area, posted in other notified tribal area will be eligible for NE Exemption only if the tribe to which employee belongs is also recognized as Scheduled Tribe (ST) in the posted area also.

2. It is not always the case, that all the ST employees of one tribal area, working in the same tribal area are eligible for NE Tax exemption.(For example all the ST employee of Assam is not eligible for NE Tax exemption).

Regards,

Venkat Polisetty

[mastan_shaik1]

Dear Sahu,

The below are screen shots for Ethnic Origin and 40NET Feature. Though I have maintain still issues is not resolved.

In the payslip Tax is not fully get exempting , tax partially exempting.

Thanks & Regards,

Mastan Shaik.

[BalaAP]

Hi,

1) Have they been posted in NE state from beginning of the financial year?

2) Have you checked the output of INTAX function output (in original run & after increment run) and identified any different symptoms in calculations?

Can you show the INTAX output of this case (for both periods - with & without basic hike.

regards,

Bala..

[mastan_shaik1]

Hi Sir,

1) Here is no SAP Posting, we are using JV posting and is been posting from April.

2) In INTAX function output /3EN & /4EN are generating. Instead of fully Tax exemption, Emp is getting Partial tax exemption. Tax should not be deducted for NE EMPs.

In the month of January Rs.1358/- Income tax deducted for NE state Emp.

Is there any limit for NE state Emps Income Tax exemption or it should be fully exempt? Though Emp getting NE tax Exemption, Income tax is generating for this Emp. This is because of NE Tax is partially exempting.

Please do needful.

Thanks & Regards

Mastan Shaik.

[BalaAP]

Hi,

Please check whether your payroll runs through pcr's INAR & INTD which are calculating tax on arrears. If yes, then check the constants ARTDS and ARLMT in v_t511k table and check your payroll run logic (in simulation mode).

Please also show me the F16 table after the function ININI. Also, please show me the recent wage types from INTAX function of this employee (last payroll run with out pay-hike), so that I can check how NE tax exemption is calculated.

regards,

Bala.

[BalaAP]

Hi,

I feel, in your system, salary carried forwarded through retro periods are taxed as arrear income and is being taxed with the above function.

You may have to check in the corresponding month on when you updated the back-dated changes in basic pay infotype, so that, you will come to know.

regards,

Bala.

[mastan_shaik1]

Hi Sir,

Sorry for the delay in reply,

1) Here in schema INAR & INTD are commented.

2) ININI F16 Table

3) INTAX Output

Here

a) /4EN, /3EN generated and also /460 generated. For North east state Emps whose ethnic origin is ST /460 will be generated?

b)Whether NE state Emp Income tax Exemption receive partially or fully ?

Here in this case Exemption is coming Partially, on the remaining part Tax is calculating so that tax deducting 1357.61/-

Thanks & Regards,

Mastan Shaik.

[BalaAP]

Hi,

Good to see your screen shots and your patience.

I can see the F16 table shows /460 - which has calculated tax in previous months.

You may have to analyse the month RT table, exactly when the income tax starting deducted (and no income tax deducted in previous month).

I mean, you mentioned that the pay got revised from MAY month onwards in October month. Then you may have to dig OCT month RT tables & F16 tables and analyse. Checking the RT in sub-sequent periods will not yield any clue.

You may have to debug INTAX function in that period (during when the tax got calculated at first instance) and you can catch the clue.

I think, during retro calculation, the income tax is recalculated (but deleted since, it cannot change /460 in retro periods). So, the arrear income got carried forwarded month-wise and brought to current month and added to GROSS pay and tax is calculated in the current month.

But during this calculation, probably, INTAX may have only total lumpsum arrear income and it may not know it has NE tax exemption or not. So it may treat it as taxable.

You may clarify with SAP for NE tax treatment on arrears.

Also, please debug the INTAX function of OCT payroll.

If INTAX has the problem it can be solved by adding some custom PCR's (after INTAX calculation). But you should ensure the cause and exact point, where this problem arises.

regards,

Bala.

[venkat_polisetty]

Hi,

Kindly make sure the return value of feature 40NET as 1 for respective ethnic origins which will maintain in IT0077 and you must not maintain any record in IT0584 as well.

Hope this will help you.

Regards,

Venkat Polisetty

[mastan_shaik1]

Dear Venkat,

1. 40ENT return value set as 1 only.

2. I have maintained ethnic origin as ST in 77 IT.

3. There is no 0584 IT record maintained for this EMP.

Still Tax is calculating for this Emp from this month. Tax is not Exempting for this after changing his/her basic pay infotype in the current month with effect from back date. For other Emps who belongs to NE state Tax is Exempting.

Please Help Me, Is there any note should have to apply for this?

Thanks & Regards,

Mastan Shaik.

[venkat_polisetty]

Hi Mastan,

Kindly share the 40ENT feature and IT0077 details.

Regards,

Venkat Polisetty

[mastan_shaik1]

Dear Venkat,

Please check the below screen shots,

In Payslip Tax is Exempting under NE Tax Exemption field some extent but again Tax is calculating on the remaining part that is showing as Net Tax - 3514/-. As per NE State Tax Exemption the Total Income should be Exempted from Income Tax.

Please clarify Me.

Thanks & Regards,

Mastan Shaik.

[former_member194940]

Hi, Kindly show the details of ethnic group table.