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Issues in Conveyance Allowance amount in Exemption U/S 10

New issues rise Now....

For New (mid month) joinee at the first month Exemption U/S 10 is calculated based on the Conveyance Allowance amount *12 months (or no. of remaining months for financial yr end), but in my client income tax Exemption U/S 10 based on the actual salary (not earned salary) from the first month onwards.

For example :

Employee X,

Joined date 15.08.2011,

Conveyance Allowance = 800 INR. Earned Conveyance Allowance for 15 days = 400 INR.

While Start Payroll for the period 5th (August) 2011. The WT /130 Exemption U/S 10 = 3,200 (400*8). Based on this Conveyance Allowance The Exemption U/S 10 calculated, But I want to calculated the Exemption U/S 10 at first month (august 2011) based on follows,

August month earned Conveyance Allowance = 400 INR + Actual Conveyance Allowance per month =800*7 =5,600.

Exemption U/S 10 = 6,000 INR.

Please give me some solution

Thanks and regards

Mohan .V

Edited by: mohantamilan on Sep 23, 2011 5:27 PM

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    author's profile photo Former Member
    Former Member
    Posted on Sep 26, 2011 at 11:14 AM

    Further to Cheru & Raghu reply, let me cleared you more, see, your projection is working perfect, based on current month gross. system project the gross salary for rest of the month.

    Here system work on two basis, Actual basis & Nominal basis.

    In your scenarion it is working on actual basis, based on current month it is project for whole year

    Whereas in Nominail basis, system project like this

    due to mid month joining or LOP employee salary for current month i.e April is 4000 whereas it is 10000/- so his projection would be 40001 + 1000011

    For details, refer note: 941288

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  • author's profile photo Former Member
    Former Member
    Posted on Sep 23, 2011 at 12:08 PM

    Hi,

    I think for your earlier thread someone had replied that in the 1st month your calculations will be as per the actual received amounts for mid month joinees,however when you run the second payroll for this employee the system shall consider full attendance and Conveyance shall be 800 x remaining months + the already populated 400 in RT Tables.

    After you run the first Payroll live you can check the 2nd payroll with simulation may be this will clear your doubt.

    Salil

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  • Posted on Sep 23, 2011 at 12:09 PM

    Mohan right now how the system is takeing the conveyance amount is takeing 800 or 400 please do let us know

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    • See, in the case of mid month joining, in the current month as the system gets a value of transport <800, it considers it to be the actual value for exemption and calculates the tax exemption on this amount, as this is the actual exemption to be given,but when the next month payroll is executed, the system gets the correct value and as said by salil in the earlier post, the system populates the value @ 800*no of month remaining + the 1st period of mid month joining and gives exemption.

      Hope this clarifies your querry.

      Raghu

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