Exemption on Other Allowances and Reimbursements 

Purpose

This component is used to calculate tax exemption on any allowance or reimbursement that your company may want to give to the employees.

You must use this component only:

·       For those tax exemptions that have not been provided as a standard by the system. For example, Exemptions on Leave Travel Allowance, Medical Reimbursement, Medical Insurance, Child Education Allowance, Child Hostel Allowance.

·       When the tax exemption is not a fixed amount and varies from one employee to the other depending on the proof of expenditure provided by the employee.

Integration

·       The General Payroll function for Allowance/Reimbursement Treatment payroll function (INCTX) calculates the tax exemption on any allowance or reimbursement that you may want to give to your employees.

·       The system reads the Basic Pay infotype (0008), Recur. Payments/Deds. infotype (0014) or Additional Payments infotype (0015) for the payments made for the allowance or reimbursement.

·       The system reads the exemption amount from the subtype of Exemptions infotype (0582), created by you through table view Subtype Characteristics (V_T591A).

Features

...

·       When the employee submits the proof of expenditure, you must enter the amount in the subtype created by you for Exemptions infotype (0582).

·       Exemption on the allowance or the reimbursement is the minimum of:

...

                        a.     Allowance or reimbursement made through the Basic Pay infotype (0008), Recur. Payments/Deds. infotype (0014) or Additional Payments infotype (0015).

                        b.     Total amount of exemption entered in the subtype created by you for Exemptions infotype (0582).

                        c.     Maximum limit of exemption maintained in table view Taxability of Wage Types (V_T7INT9).

See also:

Exemption on Other Allowances and Reimbursements Configuration