Income tax

[Former Member]

Gurus

We ran Payroll from April2011 to Sep2011 by doing Adjustment in Incometax MVT1 for 6Months

We also ran Off Cycle payroll which has Tax (Without Adjustment in tax).

Now we came to know the Tax exemption limits in V_T7INT1,V_T7INT3 are last years slab.We are chaning manually the IT Slabls from April2011-March2012.

If we run OCt2011 what will be the Impact for the Below

1. IT Slabs were Wrong

2. IT Adjustments Done using MVT1

[Former Member]

.

[raghu_c]

System will automatically take care of the IT deductions as per existing slab rates configured in the system.

The system will do the calculations based on total tax payable, tax deducted and payable in the future months and deduct accordingly.

Raghu

[Former Member]

Hi Raghu/Gurus

Already we completed 6months payroll. Now if we make changes from 01.04.2011 and run payroll will it make retro from April2011-Oct2011 (Including Off Cycle)

Or Since we have done the Adjustments through 8VT1, will it run only on OCt2011 and compraise all available tax.

Kindly help me in this.

[raghu_c]

There is no prolem, the system takes care of all the changes.

Raghu

[Former Member]

Hi Raghu

System will take care. That is fine. But i want to know about Rero run.

[raghu_c]

System will not perform any retro runs, as you have entered Income tax details manually in the system for previous periods. MVT1 overrides all system calculations and will be treated as final tax deducted.

Raghu

[Former Member]

Hi Raghu

Thanks fro your reply.

Hi Gurus

Anyother views on this.

Then What about Feature : 40MWT.

Edited by: HRSAP2011 on Oct 10, 2011 11:52 AM

[Former Member]

40MWT returns the value that determines the monthly tax re-computation behavior during retroactive payroll run.

0 - indicates that the system recomputes the tax components for the

current quarter only.

1 - indicates that the system recomputes the tax components for all the four quarters.

2 - indicates that the system recomputes the tax components for all the quarters, except the first quarter.

3 - indicates that the system recomputes the tax components for all the quarters, except the first and second quarter.

4 - indicates that the system recomputes the tax components for quarter four.

5 - indicates that the system does not recompute the tax components for any quarter.

[Former Member]

Hi jinu

Values are fine.

My Dout is for my above issue what should be the value in Feature. Kindly let me know

[Former Member]

Hi,

The changes carried out for IT slabs by you are in between the FY period right,earlier for some months you have maintained MVT1 as tax WT Right.Now when you run payroll for any employee you have to do a forced retro from 01.04.2011 and check the results.

1-run regular payroll for 1 employee and check if gross and TDS are as per slabs,if NO

2-run a forced retro for him and now check details.

You will get the desired results of taxation,show this to a taxation person for confirmation if you any doubt.SAP has the Tax functionality to adjust your YTD Gross and work out Tax even after you maintain MVT1.the Tax gets adjusted accordingly in the remaining months,Try it and check.

Salil

[Former Member]

Hi Salil

Thanks for your input. We have used Custom WT 8VT1(Coped from MVT1) and changted the Rule INVT to ZNVT

Is it right method or do we need to use MVT1 only (and INVT rule)

[Former Member]

Hi,

You have done proper config,now try as per what i have earlier replied,and if you feel your query has been resolved you can close the thread.

Salil