Chennai Ptax calculation during Withdrawn stage in mid month
Hi Experts,
As i know chennai Ptax is calculated twice in a year 6th and 12th or 5th and 11th period.
But if employee resign during the mid cycle example:employee joined april and resigned in mid july, will ptax is calculated till that period or it will ignore ptax and run salary.
Appricate your response.
Regards
Sai
Hi Siva,
Professional tax cannot be prorated as it is not deducted on basis of attendance.
The Chennai professional tax is purely dependent on Gross Salary. For example an employee joined in the mid of the year for example an employee joined in the month of Feb and left in the month of august His/her gross salary is 10,000
According to rule it will divide 10000 by 6 months His professional will get deducted according to slabs
Many organizations deduct PT on a monthly basis by way of equal installments across a half –year period. For example, if an employee earns more Rs 15,000 each month (more than Rs 75,000 in a half-year), a sum of Rs 1095 should be deducted towards PT (please see the PT rate table above). Organizations following the equated monthly PT deduction method deduct Rs 182 (Rs 1095/6) each month towards PT in the monthly payroll. At the end of 6 months the organization will have deducted Rs 1095** for PT remittance. All is well.
**Rs 182 x 6 is actually Rs 1092 and not Rs 1095. This rounding-off problem can be easily solved by simply adding Rs 3 to the PT deduction amount during payroll in any of the months during the half-year period.
What happens if the employee does not work for the entire half-year period but leaves the organization at the end of say, 3 months? For example, let us assume that the employee works from 01-Apr-2012 to 30-Jun-2012 during the half-year period.
The company will have deducted Rs 546 (Rs 182 x 3) for the 3 months as per the equated monthly PT deduction logic. For the 3 months, the employee earned Rs 45,000 (this is the half-yearly salary since the employee leaves the organization), and for Rs 45,000 the organization should have deducted only Rs 235 as PT (please see the PT rate table above). In addition, Rs 546, the deducted PT amount, does not fall in any PT slab as specified by the Chennai Corporation. Ideally, the organization should refund Rs 311 (PT deducted in excess) to the employee. In practice, most organizations just remit whatever PT is deducted from employee salary. We have come across instances where PT authorities have questioned the basis of PT deduction when PT amounts do not fall under any PT slab.
There can also be instances when the equated PT deduction logic can lead to under-deduction of PT.
Let us assume that an employee earns Rs 7,000 per month (Rs 42,000 in a half-year period). The PT deduction for a half-year period should be Rs 235 (as per the PT slabs). As per the equated PT deduction logic, the organization will deduct Rs 39 per month (Rs 235/6). If the employee leaves the organization at the end of 5 months, the organization will have deducted Rs 195 as PT. However for an employee salary of Rs 35,000 (Rs 7,000 x 5 months), the organization should have deducted Rs 235. This is a case of under-deduction of PT.
The flaws of the equated PT deduction logic will come to the fore for any employee who does not work the entire six months in a half-year period.
If you are in favour of the equated PT deduction method and argue that you can always adjust the excess or short PT in the final settlement processing if an employee quits before the end of the half-year period, we will simply say that this will not be possible in case an employee absconds or does not have adequate settlement salary to recover the short PT in full.
In other words, the equated PT deduction logic is flawed and is better not followed. Of course, if an organization does not deduct PT each month but deducts PT only once every half year, this problem will not occur.
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Income tax issue for mid month joinees
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Edited by: mohantamilan on Sep 26, 2011 2:52 PM -
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Chetan -
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Would like to know how to close mid month in situations like mergers
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I hope there is no option of defining a new period in your calendar for this type of activies, as a workaround you can proceed with mid month end activities as usual and you run your report to get the data, once the reconciliation is over you can enter the data for the rest of month and then you can close the period as normal.
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Information about financial closing in mid-month
Hello,
I have a question regarding financial close. Our fiscal year is a calendar year with one special period configured in the system. For some rare circumstances my company has to do a mid month close in June. So we need to close June by June 15th and from June 15th u2013June 30th, we have to see Julyu2019s period ( 7th) when we post a document . Is that possible to do in SAP. Can we change any config in the midst of the year or in a live system. Is so how.
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The transactions are perfects! But is there any place where we can check the value summarized and mainly that the quantity of the movement type 262 be excluded of the quantity total like the column "Quantity withdrawn" in process order.
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Dear Experts
As per the client requirement PF Contribution on "Eligible pay or PF basis which ever is less" i.e Basic 6500 and Contribution 780/- only.
But in case of any one joined in Mid month with basic salary 9000 in this case PF calculation showing wrong (calculating on working days)
I want to deduct 780/- as PF Contribution for mid month joiners also.Hi Mallikarjuna,
With "Eligibility pay or PF Basis whichever is less" option selected, PF contribution is the minimum of below 2 components
1. Actual basic salary of the employee
2. Eligible pay of the employee (eligible pay is INR 6500 and is maintained in constant PFBAS)
SAP by default pro-rates both these components for mid month joinees. Lets take an employee with DOJ 11.04.2014 and basic pay 12,000.
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Solution:
I understand that you do not want the eligible pay to be prorated. i.e. the PF contribution in above case should be 12% of 6,500 = 780
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Payroll>>Payroll:India>>Statutory Social Contribution>>Provident Fund>>User Exit: Override Employer Pension Basis
Regards
Ravi Patni
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