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Technical Data

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

Prerequisites

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

Features

Function for India: E-Separation Solution

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.

Tax Calculation for Housing Perquisites

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.

Carrying Forward Retroactive Entitlement of Reimbursement

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.

Country Specific Enhancement on Company Loan

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.