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Income Tax Exemption for Conveyance Allowance & Vehicle Maintenance

Hi,

We have maintained conveyance types in IT583 based on which wage types for Conveyance Allowance or Vehicle Maintenance Allowance are populated in IT0008. Exemptions are also being generated. Rs. 800 exemption for Conveyance Allowance or Rs. 1800 for Vehicle Maintenance.

We have maintained Conveyance Type for Vehicle Maintenance in IT583 baased on which Vehicle Maintenance Allowance has been populated in IT0008. We have also maintained wage type for Conveyance Allowance in IT0008.

During Payroll processing, the lesser of the exemptions (Rs. 800) for Conveyance Allowance is being generated.

Our requirement is that exemption of Rs. 1800 should be provided based on Conveyance type Vehicle Maintenance maintained in IT583.

How do we get the system to generate tax exemptions based on Conveyance types in IT583 & corresponding wage type in IT0008?

Thanks & Regards

Uma Vasanth

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  • Posted on Mar 31, 2015 at 07:04 AM

    Hi Uma,

    If you pay the employee thru a WT and maintain his IT 0583 with Con Type 7,you should tick calc perk also and then run payroll & check, the annual car perk will be 1800/- multiply by months and driver amount based on maintained no of drivers in IT 0583 OR any other exemption amount will be seen in payslip based on your Car CC Config and Payslip config.

    Try this in SAND BOX or DEV I am sure your query will be resolved.

    Regards,

    Venkat Polisetty.

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  • author's profile photo Former Member
    Former Member
    Posted on Mar 31, 2015 at 11:59 AM

    Uma vasanth,

    Income tax exemption on conveyance can be given either for Rs.800 or For Rs.1800.

    As the Income tax act exemption cannot be given for both.

    Since you are paying Rs.800 as conveyance which is part of Infotype 0008 and also Rs.1800/- towards the vehicle maintenance, system considers only Rs.800/- as tax exempted.

    1. If you want to give exemption on Conveyance for Rs.800, then you need to maintain tables V_T7INT7 and V_T7INT9.And when you run the payroll the exemption amount can be seen in /3C4.

    2. If you want to give Income tax exemption for Rs.1800/- towards vehicle maintenance, then you need to maintain Infotype 0583. Here select the conveyance type 7 or 8 as COCS Employer maintained / Employee maintained, as per the eligibility of the employee.

    Check the cal. perk box and fill in the vehicle details. But only one vehicle details can be maintained here.

    Here Rs.1800/- will be treated as car perquisite and after the payroll run , you can view the same in /3C1. If the employee is eligible for driver, maintain the no of drivers as 1. You do not maintain Rs.1800/- in Infotype 0583. This is generated from table V_T7INC5.

    Before maintaining Infotype 0583 for any employee, you first need to configure the tables V_T7INC1, v_T7INC3, V_T7INC5, V_T7INC7 & V_T7INC9.

    You need to mention the car type and cc details in the above tables.

    3. If you decide to give exemption only on vehicle maintenance, then you may either club the conveyance amount of Rs.800/- in any other allowance or create another wage type only for those who are eligible for vehicle maintainence.

    Hope this is clear.

    Please post the outcome if already solved.

    Message was edited by: Lavila Vamsi

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