Income Tax Depreciation-India

Hi,
You all might be aware To Evaluate the Income Tax Depreciation in Asset Accounting we have got 2 options:-
1.   By Adopting Addittional Depreciation Area (Depreciation Area 15 (Depreciation as per Income Tax
      Act 1961)
      But the problem that I am facing is we have to give 2 Dep Key one for Book Dep & the other for Income Tax Depreciation and I have defaulted the dep keys in Asset Classes but when I am creating the Asset Master the dep key that is inputted for Book Depreciation is automatically copied to I.T Dep Area which is incorrect.
     I have activated the Dep keys.
2.   Secondly we can use Group Assets to derive I.T Depreciation I have done the necessary settings in OAYM but when Iam creating a Asset Master the Group Asset field is disabled I have checked the settings in AO21 and made Group Asset field optional but still that particular field is greyed out.
    We are using ECC 6.0 Version and I have copied COD- 1IN
    I just wanted to know whether SAP has withdrawn support for I.T-Depreciation-India if yes can anybody give me a reference note or country version release so that i can intimate the same to the client.
Regards
Sunil

Dear Ramesh,
Thnx a lot it has worked and my problem has been solved.
Regards
Sunil

Similar Messages

What is Income Tax Depreciation - India and How it is dealt in SAP?

Dear Experts,
    My Client wants Book Depreciation and Income Tax Depreciation???
    I want to know how the IT Depreciation is dealt in SAP alongwith the necessary Configuration settings....??
    Whether we will be able to show both the Balance sheets : Tax Balance Sheet as well as Companies Act
Regards,
Nimish Agarwal
deleted
Moderator: Upon next violation of SDN rules your user will be blocked

Hi Nimish,
Please follow the link below where I have replied on IT Depreciation and the concept of Group Asset earlier. This will help you.
Re: Concept of Group Asset
Re: Depreciation as per IT Act
Regards,
SAPFICO

Income tax depreciation in india

Dear All,
How do we adress the income tax depreciation in India.
As we know the depreciation treatment for Income tax depreciation is a block concept...how do we adress that...
Could any one explain elaborately if possible...short and precise inputs are also most welcome...
Please help to resolve the issue
Sapfrido

Existing group asset concept for income tax depreciation functionality was withdrawn with Note 738919.
Following limitations/restrictions are there in the existing process.
Limitations of Group Assets
Locking
Cap on the volume of transactions u2013 99,999
Limitations of Report J1IQ
Opening Balance Calculation
Depreciation Calculation for Assets acquired and Put to use for less than 180 days
Depreciation Calculation for different fiscal year variants
Assets Acquired and Sold in the same year
Asset Block Retirement by Scrapping
Asset put to use date capture
Report Formatting Issues
The solution for IT Depreciation Calculation is being revamped and the new solution shall be available in EhP5.
If you have further query about new solution better to contact SAP by raising the OSS message by using component -XX-CSC-IN-FI

Indian Income Tax Depreciation Calculation

Hi
Can any of you please explain/tell me where are the exact SAP configuration settings for the calculation of depreciation calculation as per Indian Income Tax Act by meeting below requirements as per Section 32 of Indian Income Tax Act:
1. If the Asset is being purchased and used in a Financial Year for 180 Days or below 180 Days - Depreciation has to be calculated 50% of Annual Depreciation.
2.If the Asset is being purchased and used in a Financial Year for more than 180 Days - Depreciation has to be calculated 100% of Annual Depreciation.
Waiting for your valuable reply.
Thanks and Regards
P.V.S.R.Gupta

But if I follow your suggestion of taking Period Control Method 04, it would calculate 1/2 Year Depreciaton only
No. If the asset is in use for >180 days, then it's acquisition date must therefore occur in periods 1-6 which will set the depreciation start date to the beginning of the year. This will result in a full year's worth of depreciation.
If the asset is in use for <180 days then the start date is set to mid year which results in only 6 months worth of depreciation to be posted.
All of this can be adjusted per your FYV and on a yearly basis if the FYV is year dependent in the asset period control calendar assignments table.
I'll be the first to admit that I don't know the statutory requirements of India but I know how FI-AA works and can't think of an alternative solution for you.
-nathan

Calculation of Tax Depreciation - India

Hi,
We are following the New GL Accounting setup to our US based client in India.
My Leading Ledger (US) is Jan u2013 Dec and Non-leading Ledger (India) is April u2013 March.
We also created different Fiscal Year variants (Year Dependent) as S1 and IN for both the Co codes.
I have defined and activated Non-leading ledger for India Company code.
All the transactions were posting correctly as per Leading and Non-leading ledgers except Tax Depreciation in Fixed Assets.
I was able to post correct depreciation for India Company Act Depreciation area with a stated percentage. But the Tax depreciation area calculation is incorrect.
Required Depreciation Calculation for Tax Depreciation Area as below:
For Acquires & Additions:
Rule1: If it is >=180 days (as per Non-leading ledger Fiscal year) the system should calculate depreciation as stated percentage. Eg: 10%
Rule2:
If it is <180 days (as per Non-leading ledger Fiscal year) the system should calculate depreciation of 50% on stated percentage. Eg: Stated percentage is 10%, then it should be 5%.
I already copied India standard setting IT & NL to my fiscal year variant in Calender assignments of Period controls. But when I tried to post the Tax Depreciation in the month of March as per Non-leading ledger, the system is calculating full Depreciation as per Rule1 instead of 50% of stated Percentage in Rule2.
Can any one of you kindly advice how to setup the Multi levels methods and Period controls for Tax Depreciation key in Indian Tax Depreciation area as per above requirement. I have been working on this since one week. Please help me.
Thanks for the help.
Regards,
JBC

I am not sure if this work.. but give it a try.
In your multi-level method line 1 put Acq yr = 9999, Year = 999, Per = 6, Percent = 50
line 2 put Acq yr = 9999, Year = 999, Per = 12, Percent = 10
Now what i dont understand from your question is that is this rule for the first acquisition year only?
If so, also try with Acq yr = 9999, Year = 1 (so only the first acq yr will get calculated based on the percentage).
Try this in your sandbox and let me know if it works or not!!

Issue on Projected Income Tax (Payroll India)

Hi Experts
We have upgraded the system with SP_HR Component patch level 64 and configured SAP Note 1568264.
We have an issues on Projected Income Tax.
Scenario :
Monthly sal : 25000/- and paid the same to employee in Apr, May 11.
In the month of June employee has LOP for 2 days and paid 22000/- against June 11.
Now system is calculating projected IT based on 22000/- for the remaining months i.e., 22000*10= 2,20,000/-.
Showing projected income tax as 2,20,000+50000 = 2,70,000/- (should be 3,00,000/-)
Please suggest the possible ways to resolve this.
Appreciate your help.
Thanks
Venkat Babu Kurada

Hi Experts,
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

Config of Group assets - Tax Depreciation Calculation : India

Dear Seniors,
can you please explain the configuration of the Group assets and how exactly the tax depreciation calculation in India happens for the individual assets with scheme of entries.
Thanks and Regards
Sathish

Hi,
In India, depreciation on assets for the purpose of computation of net income as per the Income Tax (IT) Act 1961 is calculated over a block of assets instead of individual assets as allowed under the Companies Act 1956. Asset acquisitions and retirements are managed over the block level. The IT Act prescribes certain rates of depreciation to be used under the Written down Value (WDV) method over these asset blocks to compute depreciation.
The following are the customization settings that may be followed in the R/3 system in order to manage your assets in the income tax depreciation area.
1. Copy the standard chart of depreciation 0IN as provided by SAP and create your own chart of depreciation.
2. Use the depreciation area 15 for the purpose of management of assets under the IT Act. Make it statistical in nature. (Reference Transaction Code: OADB). Do not check the box negative net book value.
3. Specify that the Income Tax depreciation area takes over the APC from the book but not make it identical (Reference Transaction Code: OABC).
4. Create an asset class for the purpose of income tax blocks. This asset class will be used to create only group assets. (Reference Transaction Code: OAOA)
5. Specify that the depreciation area for income tax can be managed only for group assets. (Reference Transaction Code: OAYM). This would mean that depreciation for this depreciation area would be computed only at group asset level.
6. Specify that the asset class defined in (b) above will be used for creating group assets only. (Reference Transaction Code: OAAX)
7. Two period control methods (IT and NL) have been defined in the system for determination of start or the end of depreciation calculation at the time of a fixed asset acquisition or retirement. You may use these period control methods while creating the depreciation keys for the purpose of IT depreciation.
Calendar assignments have been made for the above mentioned period control methods in order to reflect valuation requirements as per the Income Tax Act (Transaction Code: OAVH). You may create your own period control methods depending on the fiscal year variant you use. The period control methods supplied are based on the fiscal year variant V3.
8. Depreciation Keys: The following depreciation keys have been created in the system. They correspond to the income tax blocks that are prescribed under Indian tax laws. They are as below:
Depreciation Keys:
1. IN1 - Tax Depreciation - 5% -
I Hope it will give you some basic guidance.
Regards,
Krishna Kishore

Tax depreciation - calculation of WDV

Hi
where do we configure the settings for calculating the WDV for income tax depreciation or it is preset in the system
Regards
Ajay

Dear Nagesha,
Please note that J1INQ is NOT in use and this report has been withdrawn by SAP.
Please review the below note in this reference.
738919 - IT Depreciation for Assets, India
The solution for IT Depreciation Calculation is being revamped and the
new solution shall be available in EhP5 SP02.
The general availability of this report will be announced through this
note.
There is no alternative as of now for the same.
Thanks for the understanding and co-operation.
Have a Nice Day,
if you are ok with the above info, then close this ticket.
Manu
Edited by: manucs on Dec 29, 2011 10:12 AM

Issue in income tax computation

Dear All,
I have some issue in income tax calculation India Payroll for few employees.
Listed the problems below
1. Exemption Under Section 10 is not considered during Income tax calculation
2. Medi-claim is not deducted from gross salary

Hi Lakshman,
Exemption under sec 10 should be considered in the tax calculation. In the Tax calculation all the amount u/s 10 will be stored in wage type /130 and it will subtracted from the Gross salary (/416).
If this is not happening then please check the configuration of the wage type which you are using.
Normally Medical exemption will be processed before the arrival of gross salary.
Hope this will help you.
Thanks & Regards
Saroj Hial

Parallel accounting for income tax

Hello Experts,
Please explain configuration process for depreciation as per income tax.
we are using depreciation as per company act, need to extend parallel accounting (general ledger) for income tax.
Thanks & regrds,
Sachin

Hi
For Indian Income Tax Depreciation, you would have to create a new depreciation area. If you are on EhP 5, please have a look at the below business function:
FIN_LOC_CI_8
This business function would need to be activate in SFW5.
The below notes are also useful:
1964284
1997948
783919
Thanks & Regards
Sanil Bhandari

Depreciaton as per Income Tax Act

Hello Sap Experts,
We want to post depreciaiton as per indian income tax act for which we are using dep area 15. But we are not sure that which depreciation key we should use for it.
Is there any standard depreciaiton key for this. If yes how & where to find these. Please help
Thanks & Regards
Deepak Garg

Dear Deepak,
Create Two Depreciation area:-
1. For Normal Book Depreciation Area for Comapnies Act.
2. For Income Tax Depreciation area for IT Act.
Also create Depreciation Keys both for Comapnies Act & IT Act
Regards,
Alok

Calculation of Depreciation for Tax for India

Hi
In India, there is a requirement that the Depreciation for Income Tax should be calculated based on the date of Acquisition. If an asset has been acquired before or on completion of 180 days of a Financial Year, than the calculation of Depreciation is allowed for full year. If the asset has been acquired after 180 days , depreciation is allowed only for 180 days. Hence for an asset acquired on 25/09/2009, system should allow calculation of depreciation from 01/04/2009, assuming that the fiscal year starts from 01/04/2009 and ends on 31/03/2009. However, if the asset is acquired on 07/10/2009, the system should allow depreciation from 01/10/2009. Sap has delivered standard depreciation keys for the same in reference chart of depreciation for India 0IN.
But if the asset has been acquired on 01/10/2009, still the asset has to be depreciated from 01/04/2009, since the asset has been acquired for less than 180 days into the fiscal year. The system is working fine for asset capitalized on 25/09/2009 and 07/10/2009. But we are not able to map the same if asset is capitalized on 01/10/2009 and 02/10/2009. For these two dates, the depreciation should start from 01/04/2009.
I have checked the period control setting and calender assignments and everything seems to be in place. How can we tackle the issue?
Regards
Sanil K Bhandari

Hi
The same has been resolved.I Created a new assignment in Period Control IT for my fiscal year variant. For month 10, i added a new line item with no of days as 2 in addition to no of days as 31 for month 10.
Regards
Sanil Bhandari

FI-AA: no depreciation in depr. 15 (income tax) in fiscal year when retired

Hello all!
I have a question concerning settings for a FI-AA depreciation key concerning depr. area 15 (income tax; Slovakia):
Calculation of depreciation in depr. area 15 (income tax) must be ZERO in case of retirement during fiscal year (no pro rata until retirement date).
Thanks for an answer.
Bernd

Hi Bernd,
Use a depreciation key with period control 06 At the start of the year for retirements
When you have made depreciations run in old months in the year it will turned back with the retirement posting
Paul

India Tax Depreciation (group asset)

Hi FICO experts,
    I'm having some problem with depreciation calculation for group assets to adhere to India IT Tax Depreciation regulation. As per IT law,
1. asset acquired <180days shall be depreciated at 1/2 of the depreciation rate for the fiscal year
2. asset acquired >180days shall be depreciated at full rate for the fiscal year
    I've created depreciation key with period control NL and IT, and configure 2 depreciaiton area i.e 01 for book and 02 for tax depreciation in India COD. 02-Tax depreciation is configured as managed at Group asset.
    I created 2 Assets i.e Asset A and Asset B and both linked to Group Asset C. Say the depreciation rate is 15%
1. Asset A - Acquired on P1 of 2008 --> INR10000
2. Asset B - Acquired on P9 of 2008 --> INR10000
   A & B are linked to Group Asset C in 02-Tax depreciation area.
     When I view Group Asset depreciation, I noticed that the deprecition for 2008 computed as (1000015%)+(1000015%). Thus, although Asset B is still being depreciated at full rate of 15% instead of half of the rate.
    Besides, is that normal that I'm not able to see depreciation at Asset A and Asset B in tax depreciation area 02 when they are managed at Group. I can only view the deprecation at Group asset C?
    Appreciate help if anyone have similar experience. Thank you in advance.
rgds
WJ

Hi,
If you want to adhere Indian IT laws then follow the below mentioned steps:
1. Maintain a relationship of 1:1 of AS01 & AS21, means when you create a new normal asset it should be tagged with a new group asset.
2. Try to use SAP standard delivered dep. keys.
3. Change asset value date determination in SPRO.
4. Tagged group asset into the normal asset master.
5. Check tax dep.figures under group asset.
Regards
Anuj Agarwal

Tax depreciation calculation - India

Hi,
For calculating Tax depreciation for India, we use group assets in asset master (dep area 15).
SAP standard report J1IQ is obsolete and can not be used.
How to calculate tax depreciation for India.
Requirement for India tax depreciation is :
An asset is put to use < 180 days, depreciation will be 50% of the depreciation rate for that asset (say dep rate is 15%, depreciation will be 7.5% of the asset value.
If asset is put to use > 180 days, depreciation will be 100% of the depreciation rate for that asset (say dep rate is 15%, depreciation will be 15% of the asset value).
J1IQ is obsolete.
Most of the consultants are facing this problem.
What is the solution???????????

Dear Nagesha,
Please note that J1INQ is NOT in use and this report has been withdrawn by SAP.
Please review the below note in this reference.
738919 - IT Depreciation for Assets, India
The solution for IT Depreciation Calculation is being revamped and the
new solution shall be available in EhP5 SP02.
The general availability of this report will be announced through this
note.
There is no alternative as of now for the same.
Thanks for the understanding and co-operation.
Have a Nice Day,
if you are ok with the above info, then close this ticket.
Manu
Edited by: manucs on Dec 29, 2011 10:12 AM

Income Tax Depreciation-India

Similar Messages

Maybe you are looking for