Perquisites tax paid by employer

[former_member320890]

Hi,

Recently we have upgraded the system from EHP3 to EHP7. Now the issue is that our employer is paying the income tax on behalf of employees on perquisite value of housing. So our requirement is that the liability of perquisite tax on housing should be put on the employer by the system instead of employee and it should be appear in form 16 under 192(1A) as the tax paid by employer.

Presently we are maintaining IT 581 for company owned accommodation and system calculates perk value and put it in /413 and added to gross /416 and liability of tax is putting on employee instead of employer. 

           

So please help us on this issue

Regards,

Santosh Kadlag

[venkat_polisetty · Accepted solution]

Hi Santosh,

Kindly check below mentioned details:

609605 - Form 16/12BA changes as per circular

1528165 - Form 16: Layout changes for financial year 2010-11

and also check with BADI 'HR_IN_TAX_EMPLOYER' and go through the Documentation.

Regards,

Venkat Polisetty

[Former Member · Accepted solution]

In addition, check if the below lines are added under the INTAX function in your schema:

PIT INER    NOAb

PIT INET    noab

[former_member320890 · Accepted solution]

Hello Venkat,

          Thanks for your favorable reply. I will check with the details given by you and let you know.

Thanks

Santosh Kadlag

[former_member320890 · Accepted solution]

Hello Tania,

     line mentioned by you has already added under the INTAX function in schema but it is commented

Thanks & Regards,

Santosh Kadlag

[Former Member · Accepted solution]

Please activate these lines(they should not be commented)

[former_member320890]

Hello Experts,

     Thanks for your valuable time and guidance

Regards,

Santosh Kadlag

[Sujith_EM]

Hi

The  solution provided by SAP is for tax paid by the employer in case of company owned accommodation.

More over these calculations happening in schema after income tax function hence you cant include this amount in tax deducted so far (/456) for the month .

In case of your scenario you need to modify the standard function and add the logics.

Regards

Sujith

[former_member320890]

Hello Experts,

          As you suggested I have activated the Badi "HR_IN_TAX_EMPLOYER" & line "PIT INER    NOAB", "PIT INET    NOAB" in the Schema after INTAX in INN1.

              In addition of the above I have maintained the feature 40TOP for allowance grouping & activated the business function "HCM_LOC_CI_21"

              Now in the output table WT /4TM, /4TA, /4TR is get generating for the tax paid by the employer but liability of employee tax is not reducing upto the amount extent of tax paid by the employer i.e. upto the value of WT /4TA & /4TM. So still system is deducting the employee's tax on whole taxable amount including housing perquisite value.

          So please guide how to reduce the tax liability of employee upto the extent of tax paid by employer.

Regards,

Santosh Kadlag.

[Former Member]

Hello,

Yes, it does not deduct from /460 but as per the last line of PCR INET, it adds to /110, which means that the employees net deductions are reduced by this amount.

So effectively, the /4TM value is reduced from deductions. Check the net salary of the employee, it should reflect accordingly.

Regards

Tania

[former_member320890]

Hello Tania,

     Yes, I have check the net salary of the employee and as you said it is reduced by the amount of tax paid by employer. It means that we are giving refund to the employee of the amount of tax paid by employer.

     But as we are paying the tax on behalf of employee & not refunding the Tax amount, So is it possible to directly deduct the amount of WT /4TM from WT /460 and add this amount in the WT  /456 i.e. Tax deducted so far.

Thanks & Regards,

Santosh Kadlag

[Former Member]

You can copy the PCR INET to ZNET and replace the line ADDWT /110 with SUBWT /460.

In your schema, call ZNET instead of INET.

[former_member320890]

Hello,

     I have changed the PCR INET to ZNET and made the above changes also add the line ADDWT /456 & ADDWT /470 for addition of employer tax in the WT /456: tax deducted so far & /470: total tax deducted but it seen that when we goes in the next month, then previous months value of /4TM which was added in the WT /456 & /470 is replaced by current month value of /4TM.

     Employee's current month tax is reducing but due to above issue total tax liability is not reducing cause employer tax is not remained saved in the above WT for every month. So can you help in this issue please.

Regards,

Santosh

[Former Member]

Without adding the lines ADDWT /456 & /470, I think it should work correctly. Because /456 calculated by INTAX already includes the employer tax. So I don't think we need to again add it to /456. Am not sure since I cannot test this in my system.

Can you show me a screenshot of the input & output of ZNET when only SUBWT /460 is mentioned.

[former_member320890]

Hello,

     Below are the screenshot of input & output of ZNET when only SUBWT /460 is mentioned

Input of ZNET                                                                                             

Output of ZNET

Regards,

Santosh

[Former Member]

Ok, add below lines at the end of ZNET:

AMT=  /4TA

AMT-  /4TM

ADDWT  /456

[former_member320890]

Hello,

     I have add the above line but its not working.

Regards

Santosh

[Former Member]

Please send a screenshot of input, processing & output of ZNET in the payroll log.

[former_member320890]

Hello Tania,

     As said by the Sujith, I think also it could not be possible in standard income tax function cause calculation of tax paid by employer on perquisite value are executing after the above function in schema. So i am closing thread.

     Thanks for your valuable guidance & time.

Regards

Santosh Kadlag

[Sanky]

Hi Santosh,

As Tania said check the mentioned two lines.

In the standard schema it's generally commented. So you need to active this line.

Regards, Sankarsan

[former_member320890]

Hello Sankarsan,

           as you said these line are commented in schema. i will let you know after checking the same

Regards,

Santosh Kadlag