/4MI Monthly taxable income Calculation

[Former Member]

Dear Experts,

I have gone through the SAP Documentation related to the calculations of /4MI but im not able to understand the G2 calculation.

Please let me know how to calculate /4MI.

Thanks in advance

Sravanthi

[dsharmak]

Hello Sravanthi,

In standard /4MI is calculated with following methood:

   As per the requirement provided by the NSDL, this value should be  for the taxable income relevant period only. As the available taxable amount in the system is annual only, you are provided
with the closest approximation to the monthly gross income as per the advice of our legal consultant. This value is calculated as
   below:

   Assuming that the Gross Total Income is represented as:

   Gross Total Income (/434) for April = G1 * 12

   Gross Total Income (/434) for May   = G1 + G2 * 11

   Gross Total Income (/434) for June  = G1 + G2 + G3 * 10  Where,

Gn is the Monthly Gross Income for the nth period. Now, to calculate the value of G1, system divides the Annual Gross Total Income by 12. Once G1 is available, any further value

can be calculated using formula:

G2 = [{(GTI of current period) - (GTI of previous period)} /  (Current projection factor + 1)] + G1

The logic for calculation of /4MI is as follows:-
/4MI = (/434 - CRT /4MI - /125) / Prj factor + /125

If the Taxable Income calculated, as mentioned above, is not as per the understanding/requirement of your organization, a BADI is provided to update this value as per custom written code. The
BADI is HR_IN_F24Q_TXBL_INCM. 

You can acces it in the IMG under:
Payroll -> Payroll India -> Other Reports -> Form 16 and Form 24
-> BAdI: Calculate Taxable Income of the Employee for Form 24Q.
For further details, refer to the documentation of the BADI.

Best Regards,

Deepak.