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Wrong Tax Calculation

Hi Experts,

Need your kindly help and guidance on this issue which we are facing, We have an employee for whom we have hired in mid of August Period , for example 15th, then in september we have ran payroll for him, so payroll calculated 15 days of August and full month of September , Payroll run was really a successful one.

But in the HR form we were not able to see the income tax deduction amount in the deduction part in HR form. Earnings and other deductions have brought forward for the month of August in september, but Income Tax didnt brought forward by system to september.. now i would like to do that where i need your expertise advice on this.. Since i am new to indian Payroll need your guidance as well.

Thanks

Sriram

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4 Answers

  • Best Answer
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    Former Member
    Oct 29, 2015 at 09:32 AM

    If we want arrears should be shown on payslip we will have to design payslip as required, With the help of General program control paremeters while designing remuneration statement variant.

    Untill and unless we do not that system do not show arrears avalues but it adds net pay of previous month to current month i.e after tax dedution it brings forward to current month.

    As far as i know even thoguh it is monthly tax process we can not bring them to current month as arrears, system brings net pay after deduction tax. When we want to show them as arrears then we should add them in payslip after writing PCR else we should show them on payslip With the help of General program control paremeters while designing remuneration statement variant.

    Go through log thoroughly you get an idea.

    Regards

    Venkatesh

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  • Oct 29, 2015 at 03:56 AM

    Hi,

    When you will be running from the September payroll with retro of August payroll on that time system will recalculate the tax from August onwards and bring into RT table of September Payroll.

    So you 1st check in the September Payroll RT table. There have /460 is being generated or not. If not then share the RT table details. Tax will not deduct always if current month salary with projection is less than the slab.

    If it's coming then check in the HR form Window section as well as in the Cumulation ID's section that have you insert /460 wage type or not.

    Like example suppose employees salary is 4.8 lacs and he has joined on September 15th. So on the September month he is getting 20K (approx.) so his financial income would be 20K+(20K*6)= 1.8 K so he is less than 2.5lacs slab. This is a simple example where did not consider exemption and other's tax benefit.

    Regards,

    Sankarsan


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    • Hi,

      Sankarsan is right. In India, tax is calculated on annual basis (monthly salary is projected for rest of the months) and annual salary is calculated. For this annual salary, various tax exemptions & deductions are reduced as per his eligibility and balance is taxable income. If this amount is less than his tax slab, then no tax will be deducted.

      Indian tax slab is:  upto 2.5 Lakhs - No tax

                                   2.5 Lakhs to 5 Lakhs - 10% tax

                                   5 Lakhs to 10 Lakhs - 20% tax

                                    Above 10 Lakhs - 30% tax.

      You can check the tax slab rate in table v_t7int3.

      Please check the output of INTAX function for the tax wage types.

      regards,

      Bala.

  • Nov 04, 2015 at 07:22 AM

    Hi Sriram,

    If your query is answered then close the thread with correct answer marking.

    Regards,

    Sankarsan

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    • Hi Sankarsan,

      Absolutely, i agree with it.. i always put myself lot of efforts to understand and self learning is always the best one which always stay forever.. i am just expecting help wherever i got struck,

      For example if i don't understand the functionality of particular operation or function or the functionality , i may post the queries in SCN, hope i get some help.

      Thanks

      Sriram

  • Oct 29, 2015 at 01:32 AM

    Hi Sriram,

    Your getting problem in HR FORM or RT Table?

    Kindly share the RT values for better under standing...

    Regards,

    Venkat Polisetty

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