How to address house rent in IT 581

[former_member209710]

Dear All,

I want to deduct house rent from my employee.Then please let me know how to configure the house rent in IT 581 by which the housing perk will be calculated as

The actual amount of lease or rent paid by the employer OR 7.5 %
of salary

Less

The portion of the rent actually paid by employee

With Regards,

Sujata.

[Former Member]

Hi

your query is not understandable.

[former_member209710]

My company is not giving any house rent allowance to any employee.But it has started house rent deduction from employee and the house is the company owned accommodation. How to take care of this situation.

What I did : I simply put the rent amount in Infotype 581 against company owned accommodation and not created any record in IT0008.

I'm finding the tax calculation is coming correct.But I don't know,whether I'm doing correct or not .

[Former Member]

Hi,

in the IT 0581 which accommodation type you selected and have you selected check mark for hra tax exemption ?

[former_member209710]

What I did : I simply put the rent amount in Infotype 581 against company owned accommodation and not created any record in IT0008

Accommodation Type :Company Owned

City Category :Other Cities

Rent Amt : 9600/-

Regards

Sujata

[Former Member]

Hi Sujatha,

As per my understand, For this scenario we can go ahead with a deduction wagetype which should be maintained in IT0014. And as usual you maintain the IT0581 for the HRA tax exemption.

Correct me If I am wrong.

Regards,

Narayana

[former_member209710]

If I'm maintaining in IT0014 and IT0581,system is deducting extra 9600/- as house rent.

If I'm deducting the rent only from IT0014, and not putting the house rent against company owned accommodation then the housing perk calculation is not coming correct.

Here is the Housing Perk calculation rule:

If your employer provides you accommodation that is owned by it, the perquisite value of the house would be:

15% of salary (in cities that have a population exceeding 25 Lakhs as per the 2001 census)
OR
10% of salary (in cities that have a population between 10 Lakhs and 25 Lakhs as per the 2001 census)
OR
7.5% of salary (in all other places)

Less

The portion of the rent actually paid by you

Regards,

Sujata

[Former Member]

Can you provide the payroll log screenshot, where you have getting wrong calculation and also where you are facing the problem of extra deduction of the Rs.9600.

[former_member209710]

Mr. Venkat,

If I,m wrong,please correct me

To recover the house rent of 9600/- I have to maintain the following or not:

1.A deduction wage type in 14

2.I will maintain the rent against COA (wagetype 3000 as per my configuration) in IT581

3.I will maintain the COA(I.e wagetype 3000) in IT0008

[leelamohan_kavali]

Hi Sujata,

1. If you don't mind kindly can you give some more clarity on your requirement

2. Kindly can you give screen shot of INHRA function in payroll log.

3. Once you maintain info type 0581 there is some back end program where system will read HRA info type and will consider tax exempted which is lowest amount i.e

Housing(HRA / CLA / COA) Infotype (0581)

Definition

This infotype stores information on employee housing.

Use

Use the Housing (HRA / CLA / COA) infotype (0581) to capture details on the employee housing. In this infotype, you can also capture details of any furniture or domestic help provided to the employee by the company.

While computing exemptions and perquisites on employee housing, the system also refers to the data maintained in this infotype.

Structure

·  The Housing Details section of the infotype has an option for you to choose the Accomodation Type. The type of accommodation availed by the employee determines the tax computation on housing. The system computes an exemption on Rented Accommodation, and a perquisite on Company Leased Accommodation (CLA), Company Owned Accommodation (COA) or Perkable Hotel Accommodation.

Based on the Accommodation Type selected, you also have to enter details such as the rent amount, the city category and the FRV. For example, if you choose the Accommodation Type as Rented Accommodation, you must also enter the rent amount and the city category.

If you have created your own Accommodation Types, the infotype will list the same under theAccommodation Type option. To configure customer specific Accommodation Types, go to the IMG underPayroll India ® Housing ® Define Accommodation Types.

If you have created your own Accommodation Types, the system will not use the standard computation methods on any Accommodation Type. It will instead use the computation methods that you have defined through the EXIT_HINCALC0_005 User Exit in the EnhancementHRINHRA0.

For more information on User Exits for Housing, see the IMG under Payroll India ®Housing.

·  If the company has provided furniture or domestic help to an employee, you must enter the details of the same under the Helper and furniture details section. The system uses the information maintained in this section to compute perquisite on furniture and domestic help.

·  In the Landlord's Details section, you can maintain contact details of the landlord whose property the employee has taken, on rent or lease. There are no computations performed on the data stored in this section.

Integration

When you create a new housing record, or modify the Accommodation Type or the beginning date of the infotype, the system dynamically updates the Basic Pay infotype (0008). When you save the Housing(HRA / CLA / COA)infotype (0581), the system automatically displays the Basic Pay infotype (0008) with the changed information and you must save this infotype.

If there is a change in the Accommodation Type, the dynamic action will default the changed Accommodation Type in the Basic Pay infotype (0008). If there is a change in the beginning date of the Housing(HRA / CLA / COA) infotype (0581), the dynamic action will delimit the earlier record, and create a new record having the changed beginning date.

This dynamic action is necessary to ensure consistency between the information maintained in the Basic Payinfotype (0008) and Housing(HRA / CLA / COA) infotype (0581).

For example, the employee was earlier staying in a Rented Accommodation and then shifted into a CLA. TheBasic Pay infotype (0008) earlier contained a housing wage type that had the tax code for Rented Accommodation. The dynamic action now updates the Basic Pay infotype (0008) with the housing wage type that is associated with the tax code for CLA.

See also:

Housing

Ur's Mohan