Incremental Medical Perk
Use
This function enables the system to calculate the Incremental Medical Perk. Incremental Medical Perk forms a part of the basis for Professional Tax. Medical Perk that has already been taxed in the previous period, does not form a part of the Professional Tax basis in the current period. Here, only that part of the Medical Perk is taxed, which is incurred in the current period.
Incremental Medical Perk can be calculated in the following ways:
· If the Medical Reimbursement for the first time exceeds the Tax Exemption Limit set by the government, the excess amount is treated as Incremental Medical Perk.
· If the total Medical Reimbursement till date has already exceeded the Tax Exemption Limit in an earlier period of the current financial year, the Medical Reimbursement in the current period is treated as Incremental Medical Perk.
Integration
Payroll functions WPBP, P0014, P0015 and P0267 read the Basic Pay infotype (0008), Recur. Payments/Deds. infotype (0014), Additional Payments infotype (0015) and One-Time Payments Off-Cycle infotype (0267), respectively for Medical Reimbursement/Insurance payments and populates the Input Table with Medical Payment wage type. The system stores the Medical Exemption that is brought forward from the previous employer in the Input Table against the Previous Employment Medical Exemption wage type (/4V6). Medical reimbursement payroll function (INMED) reads the Exemptions infotype (0582), MDA subtype record, the Input Table and the Cumulative Results Table, and generates the Incremental Medical Perk wage type (/3M3).
Prerequisites
You must have run the payroll for the current period.
Example
For November 2001, an employee receives a payment of Rs.5,000 on account of Medical Reimbursement. But he or she has already claimed payments of Rs.14,000. In such a case, the employee gets an exemption of Rs.1,000 only for the current period's payments (if we take Rs.15,000 as the limit for Medical Reimbursement set by the government). Rs.4,000 is treated as Incremental Medical Perk for the current period and this forms a part of the basis for Professional Tax.
Again, for December 2001, an employee receives a payment of Rs.2,000 on account of Medical Reimbursement. In such a case, since the Medical Reimbursement payments till date has already exceeded the Tax Exemption Limit of Rs.15,000, the entire amount of Rs.2,000 is treated as Incremental Medical Perk for the current period and this forms a part of the basis for Professional Tax.
See also: