Technical Name of Business Function |
HCM_LOC_CI_21 |
Type of Business Function |
Enterprise Business Function |
Available As Of |
SAP Enhancement Package 5 for SAP ERP 6.0 |
Technical Usage |
Human Capital Management |
Application Component |
Payroll India (PY-IN) Personnel Administration India (PA-PA-IN) India — Public Sector (PY-IN-PS) |
Directly Dependent Business Function Requiring Activation in Addition |
You can use this business function to meet legal and general business requirements in India in the following areas:
Calculate tax on housing perquisites
Carry forward employee's retroactive entitlement of reimbursement
Perform deferred loan interest repayment
Calculate loan interest by a progressive method
Calculate tax on interest rate advantage from a company loan
You have installed the following components as of the version mentioned:
Type of Component |
Component |
Is Needed Only for the Following Features |
Software Component |
SAP_HRCIN 604 EA-HRCIN 605 |
The business function provides enhancements in the Payroll India – Public Sector. With this functionality, you can enable the E-Separation Solution, which allows you to automate the various processes involved when an employee leaves or resigns from the organization.
For more information, see E-Seperation.
The non-monetary perquisites such as housing perquisites are liable to tax. This function enables you to calculate monthly tax amount on housing perquisites. If the employer offers to pay the tax for employees, this function can grant this benefit to selected employees. By making modifications in relevant payroll objects, you can apply the tax calculation to other non-monetary perquisites.
For more information, see Tax Calculation for Housing Perquisites by Average Tax Rate.
If increases in an employee’s entitlement of reimbursement are effective from a past date, this function enables you to carry forward the retroactive entitlements, so that the employee can claim it in the current period.
For more information, see Retroactive Reimbursement Carry-Forward.
With this function, the following enhancements on company loan are available for India:
Deferred Interest Repayment
You can repay the loan principal first; after the principal is cleared, then repay the total accumulated interest. During interest repayment, no more interest is accrued.
Progressive Interest Calculation
You can calculate the loan interest based on a progressive slab table. This functionality is well integrated with payroll calculation.
Tax on Interest Rate Advantage
If the interest rate of a company loan is lower than that of a bank loan, the interest rate advantage is liable to tax. How to calculate the tax differs from various interpretations of the legal regulations. The function provides solution for one of the interpretations. To adopt other interpretations, you can use a Business Add-In implementation to modify the tax calculation for interest rate advantage.
For more information, see Loans Enhancement – India.