Income from Other Sources 

Purpose

This component helps you to consider for taxation, the income that is incurred from sources other than that from your employment, in the current financial year.

The SAP System divides the income from other sources into:

·        Income from House Property

·        Income from Other Sources

Implementation Considerations

If an employee chooses to declare income from sources other than that from current employment, then that income also has to be taken into consideration for taxation during a regular payroll run.

Integration

The system reads the details from the Income from Other Sources infotype (0584).

The Income From Other Sources payroll function (P0584) reads the Income from Other Sources infotype (0584) and generates the internal table IOS. Deduction under Section-24 payroll function (INS24) and Details of Income from Other Sources payroll function (INIOS) read the Internal Table and the internal table IOS for the Income from House Property subtype (0001) and Income from Other Sources subtype (0002) data, respectively and generates the following wage types in the Internal Table:

/3O1 - Annual Lettable Value

This is the amount that you have entered as the Final Lettable Value in the Income from Other Sources infotype (0584) Income from House Property subtype (0001), for either Partly Let Out House Property or Wholly Let Out House Property.

/3O2 - Business Profits

This is the amount that you have entered as the Business Profits in the Income from Other Sources infotype (0584) Income from Other Sources subtype (0002).

/3O3 - Long Term Capital Gains (Normal Rate)

This is the amount that you have entered as the Long Term Capital Gains (Normal Rate) in the Income from Other Sources infotype (0584) Income from Other Sources subtype (0002).

/3O4 - Short Term Capital Gains

This is the amount that you have entered as the Short Term Capital Gainsin the Income from Other Sources infotype (0584) Income from Other Sources subtype (0002).

/3O5 - Income from Dividends

This is the amount that you have entered as the Income from Dividends in the Income from Other Sources infotype (0584) Income from Other Sources subtype (0002).

/3O6 - Income from Interests

This is the amount that you have entered as the Income from Interest in the Income from Other Sources infotype (0584) Income from Other Sources subtype (0002).

/3O7 - Other Income

This is the amount that you have entered as the Other Income (Unspecified) in the Income from Other Sources infotype (0584) Income from Other Sources subtype (0002).

/3O8 - Deductions u/s 23

/3O9 - Deduction u/s 24 (Interest)

This is the amount that you have entered as the Deduction of Interest under section 24 in the Income from Other Sources infotype (0584) Income from House Property subtype (0001).

/3OA - Deduction u/s 24 (House Repairs)

This is the amount that you have entered as the Deduction on Account of Repairs under section 24 in the Income from Other Sources infotype (0584) Income from House Property subtype (0001), for either Partly Let Out House Property or Wholly Let Out House Property.

/3OB - Deduction u/s 24 (Others)

This is the amount that you have entered as the Deduction on Account of Other Expenses under section 24 in the Income from Other Sources infotype (0584) Income from House Property subtype (0001), for either Partly Let Out House Property or Wholly Let Out House Property.

/3OD - Long Term Capital Gains (Special Rate)

This is the amount that you have entered as the Long Term Capital Gains (Special Rate) in the Income from Other Sources infotype (0584) Income from Other Sources subtype (0002).

/3OS - Short Gains on Listed Sec

This is the amount that you have entered as the Short Term Capital Gains (Listed Securities) in Additional Payments infotype (0015) for the wage type associated with the tax code STCG.

/3OG – Gift Income

This is the amount that you have entered as the Gift Income in Additional Payments infotype (0015) for the wage type associated with the tax code SGFT.

The sum of amounts in these wage types is added to the Any other Income wage type (/131). The amount in this wage type is added to the amount in Income under Head Salaries wage type (/426) to form the Gross Total Income wage type (/430). Section 80 Deductions are made from Gross Total Income wage type (/430) to form the Gross Total Income wage type (/434). Before calculating tax on total income, the system deducts the amounts in Long Term Capital Gains Normal Rate wage type (/3O3), Long Term Capital Gains Special Rate wage type (/3OD), Short Gains on Listed Sec wage type (/3OS) and Other Income wage type (/3O7) from the Gross Total Income wage type (/434). The tax calculated on Long Term Capital Gains, Special and Normal Rate, Short Term Capital Gains on Listed Securities and Other Income are added to the normal tax to form the Tax on Total Income wage type (/436).

Features

The parameters for Income from Other Sources have been configured in the SAP System as follows:

...

       1.      In case of Let out House Property (Wholly or Partly), the Deduction on Account of Repairs under section 24 is limited to a percentage of the Final Lettable Value. This percentage may vary across financial years. In the Repairs under Section 24 constant (REP24), of the table view Payroll Constants (V_T511K), this percentage has been maintained.

       2.      In the table view Payroll Constants (V_T511P), the maximum amount of interest for which you can get tax exemption under section 24 has been maintained. This amount may vary depending on the financial year during which the loan was taken. Following constants have been maintained for the different interest exemption amounts:

...

                            a.      LNS01 - Rs.30,000

                            b.      LNS02 - Rs.75,000

                            c.      LNS03 - Rs.100,000

                            d.      LNS04 - Rs.150,000

                            e.      LNSMX - There is no limit in this case. The entire amount that you enter as the Deduction of Interest under section 24 in the Income from Other Sources infotype (0584) Income from House Property subtype (0001), for Self Occupied \ Deemed Self Occupied House Property, is tax exempt.

       3.      In the table view Payroll Constants (V_T511K), the rate of taxation for Long Term Capital Gains have been maintained in the following constants:

...

                            a.      LCNRT - Long Term capital Gains (Normal Rate)

                            b.      LCSRT - Long Term capital Gains (Special Rate)

       4.         In the ST Cap. Gain rate (Listed Sec) constant (SCGRT) of table view Payroll Constants (V_T511K), the rate of taxation for Short Term Capital Gains on Listed Securities has been maintained.

       5.      In the Other Income - rate constant (OTHRT) of the table view Payroll Constants (V_T511K), the rate of taxation for Other Income (Unspecified) has been maintained.

You can maintain whether a Loan Type is valid for Section 24 exemption. To do this, go to the IMG under Payroll India ® Company Loans  ® Master Data  ® Maintain Deduction Details Under Section 24.

For details on configuring the IMG activity, refer to the IMG documentation.