Income Tax refund to the employee through SAP

[Former Member]

Dear Team,

Need your inputs on Income Tax refund to the employee through SAP.

If we have deducted excess income tax for an employee and want to refund the same from our end through SAP.

Please let me know whether we have such config in SAP, If yes how do i do it.

Please suggest.

Kind Regards

NAG

[Former Member]

Hi Nag,

In case posting has not been done and amount is not submitted to GOVT., you may think of making adjustments and rerun the payroll.

In all other cases even if you try to refund the excess amount the employee can get double benefit by claiming the excess amount from GOVT. as well...!

Regards,

Som

[Former Member]

Hi,

I suggest you to read about section 89 relief, the system will take care about excess tax deducted. In this case, if employee's excess tax has been deducted in FY 2011-2012, the system is giving relief under section 89 in his/her income tax calculation for FY2012-2013.

Section 89(1) Relief (SAP Library - Payroll India (PY-IN))

Second thing, if you have deducted excess tax for employee, in that case, employee needs to get refund amount from income tax via his/her individual ITR filing. To avoid this, you can maintain all exemption (whichever applicable according to taxation), in the beginning of every FY. and in last month of FY, you can maintain all actual exemption for the employee, so that tax will not be deducted with higher rate.

Thanks,

Nirali P.

[Former Member]

Hi Nirali,

Thanks for the useful information.

Thanks,

Santosh

[Former Member]

Hi Nag,

Once the tax is deducted and remitted to tax department, there is no refund process through payroll, it has to be taken care externally.

Regards

Whiteraystech