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
Similar Messages
-
Issue on migration of tax depreciation balances for group assets
Dear Experts,
My client is using group assets for tax depreciation report India.
The SAP implementation was done in 2006 during the data migration the
client was not clear of the values both individual asset wise and
group asset wise to migrate to tax depreciation area. So the tax
depreciation for some of the assets are migrated with some
(non caluclated) value.
Now the client want to see the tax depreciation group asset wise or if
possible individual asset wise.For this the group asset need to be
created and assigned to each individual asset in the asset master
record.
The fiscal year variant is v3, april to march with 4 quaters June,
Sep, Dec, Mar.
Now when the data migration for the current year come into picture
I can use AS81/AS82 for loading current year opening balance and
accumulated depreciation for all the group of assets as a whole. Or
I can use AS91/AS92 to load balances into tax depreciation of
each asset individually. But I am not sure whether this is correct.
And also what to do with the previous years balances. I am very
confused. Somebody suggest good solution.
When I create a legacy asset or group asset in AS91 and AS81
respectively the fields in the Takeover values screen are grayed
out and do not allow mw to input values. But I am able to enter
values by clicking the button Transactions in the Takeover values
screen and able to enter a value date , transacton type and amount
for tax depreciation area. Here again I am not convinced using 100
transaction type for current year opening balance. I used
transaction type 652(Unplanned tax depreciation on current year
acquisition) for accumulated current year dpereciation upto second
quarter septemeber 2008.
In asset explorer under "Planned values" tab the opening balance
must be visible under Fiscal year start column but it is displayed
under change column as I entered values for tax depreciation area
in AS81 in Transaction screen with asset value date as 01.04.2008
transaction type 100 and amount as xxxxxx and value date 30.09.2008
652 xxxxxxxx.
Need expert guidance on this
Rgds
KomalDear Experts,
Your inputs are awaited.
Rgds
Komal -
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 -
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
SunilDear Ramesh,
Thnx a lot it has worked and my problem has been solved.
Regards
Sunil -
Change in start date of tax depreciation not for posting in mid of year
Hi Experts,
Tax depreciation area is not for posting. The fiscal year is from Jan to Dec. I want to calculate tax depreciation from May 2011 based on Net Book Value of tax depreciation as on 30.04.2011. But once I change the start date of tax depreciation in asset master to 01.05.2011, the system ignores the previous depreciation so I am not getting the NBV of tax depreciation of 30.04.2011.
Is any setting is required to get this. I can not do changes in posting rules since this tax depreciation is not for posting any thing.
The fiscal year 2010 is closed and NBV of tax depreciation as on 31.12.2010 of one asset is 80000, If I change the start date of tax depreciation from 1.1.2011 then system correcly take NBV of 31.12.2010 for further depreciation calculation. But if i change the start date of depreciation in between of year the system is calculating depreciation based on NBV of 31.12.2010 but ignores the tax depreciation from 1.1.2011 to 30.04.2011, which I previously run using AFAB.
Need your assistance to know is it feasible to do this.
Thanks and Regards,
HarshadHi Harshad
The behaviour of the system is very much correct, it is designed to behave that way...
One, you should not have changed the dep start date....
two, NBV in SAP is always taken to be NBV @ the start of the year....
The best wayout I can suggest here is, if you are on EhP4 and EA-FIN active
a. Change the Dep Key in the asset... You can maintain Time Dependant Dep Terms in asset master i.e. Dep Key X from Jan-Apr and Dep Key Y from MAy onwards
b. This will however, calculate dep based on NBV at the start of the year, but based on new useful life
c. Considering your eg: The system is posting more depreciation i.e. 5333 instead of 5155.... So, calculate this amount outside the system and post a Manual Write up ABZU inorder to reduce the Dep and increase the NBV
Even if you are on not on EhP4, you can follow the same approach as above.... i.e.
a. Change the Dep Key in asset master.... This will throw up new dep figure, on the basis of New Useful life and NBV at the start of the year
b. Post a write up from ABZU....
No need to do Asset to asset transfer in my opinion
Only diff between EhP4 and Non EhP4 is that the differential depreciation would be lesser if you are on EhP4... i.e. instead of 5333 now, system may throw up depreciation amount of 5666.. So, you may need to post write up of 5666-5155
br, Ajay M -
Change in start date of tax depreciation in mid of year
Hi Experts,
Tax depreciation area is not for posting. The fiscal year is from Jan to Dec. I want to calculate tax depreciation from May 2011 based on Net Book Value of tax depreciation as on 30.04.2011. But once I change the start date of tax depreciation in asset master to 01.05.2011, the system ignores the previous depreciation so I am not getting the NBV of tax depreciation of 30.04.2011.
Is any setting is required to get this. I can not do changes in posting rules since this tax depreciation is not for posting any thing.
The fiscal year 2010 is closed and NBV of tax depreciation as on 31.12.2010 of one asset is 80000, If I change the start date of tax depreciation from 1.1.2011 then system correcly take NBV of 31.12.2010 for further depreciation calculation. But if i change the start date of depreciation in between of year the system is calculating depreciation based on NBV of 31.12.2010 but ignores the tax depreciation from 1.1.2011 to 30.04.2011, which I previously run using AFAB.
Need your assistance to know is it feasible to do this.
Thanks and Regards,
HarshadHi Harshad
The behaviour of the system is very much correct, it is designed to behave that way...
One, you should not have changed the dep start date....
two, NBV in SAP is always taken to be NBV @ the start of the year....
The best wayout I can suggest here is, if you are on EhP4 and EA-FIN active
a. Change the Dep Key in the asset... You can maintain Time Dependant Dep Terms in asset master i.e. Dep Key X from Jan-Apr and Dep Key Y from MAy onwards
b. This will however, calculate dep based on NBV at the start of the year, but based on new useful life
c. Considering your eg: The system is posting more depreciation i.e. 5333 instead of 5155.... So, calculate this amount outside the system and post a Manual Write up ABZU inorder to reduce the Dep and increase the NBV
Even if you are on not on EhP4, you can follow the same approach as above.... i.e.
a. Change the Dep Key in asset master.... This will throw up new dep figure, on the basis of New Useful life and NBV at the start of the year
b. Post a write up from ABZU....
No need to do Asset to asset transfer in my opinion
Only diff between EhP4 and Non EhP4 is that the differential depreciation would be lesser if you are on EhP4... i.e. instead of 5333 now, system may throw up depreciation amount of 5666.. So, you may need to post write up of 5666-5155
br, Ajay M -
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
SathishHi,
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 -
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
SapfridoExisting 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 -
Link-Group Asset Class, Depreciation Area & Depreciation Key
Dear Experts,
I am new to FI-AA Customization & have a basic query about Group Asset Concept.
I am working on Ecc 6.0 & for Country India.
I want to create Group Asset for calculation of Depreciation as per Income Tax Act. Hence there is just one Depreciation Area (for Group Assets) , but the Depreciation keys are different. E.d IN1, IN2 etc. (Country Version India)
Now the questions are :
1) Do we need to create different Asset Class for different Group Assets or to create just 1 Asset Class for all Group Assets.
E.g. I want to calculate Depreciation As per income Tax Act on Gross Block of Building, Furniture & Fixture, Motor Car, Vehicles etc. So I need to create separate Group Asset Class for each one of above or just to create one Group Asset Class.
2) If we need to create just one Asset Class for all Group Assets; how to maintain a Depreciation Key in OAYZ as there are more than 1 Depreciation Keys?
3) is there any other method / functionality to calculate Depreciation as per income Tax Act or Group Asset is the only functionality?
Thanks & Regards,
ReshmaDear,
Reshma.
Looking at your Questions let us take explanation for Group Assets :-
1 ) We need to create new different asset class for Group Class in OAOA. Then permit the depreciation area for only Group Asset in OAYM as it is in your current scenario India is Depreciation Area 15 Just select your company code in OAYM and check the Grp Asset field for respective area 15. Then go to OAAX here we have to maintain the assets classes particularly for Group Assets. So check your Group Asset classes for Group Assets. Cerate different Group asset classes for your said requirement.
In these depreciation areas, it is then possible to make an assignment to a group asset. You make this assignment in the specifications for the depreciation area in the asset master record. When you post an acquisition to this kind of asset, the system duplicates the line items from this depreciation area on the given group asset.
2 ) According to me you have to create different depreciation keys for Group Asset classes. Assign the Depreciation keys to your newly created Group Asset Classes in OAYZ and make sure you are deactivating 01 area which is Book Depreciation area.
3 ) As far as I know this is the only functionality available to handle Group Assets. How ever SAP does not have any standard Group Assets functionality. SAP does not supply asset classes to be used solely for group assets. It is we have to determine as per varying Business Process.
I hope this will clear your doubt makes you to understand. Please revert back for further clarification. Welcome you.
Regards,
Pankaj A Bhalerao.
Edited by: pankaj_ab on Feb 3, 2010 8:26 AM -
Group Assets IT - Depreciation
Hi All,
I am calculating Depreciation on Assets based on Income tax act of India.
Based on this the assets purchased less than 180 days should 50% depreciation charged.
this is running fine when I calculate the depreciation on Individual Assets.
But Client request for Groups Assets, So I assigned the Groups assets.
In case of Groups Assets. Depreciation for the assets less than 180 days also it is calculating the 100 % Dep.
Any one know how to solve this. Is there any settings needs to be change?
Thanks
RaviHi,
In OVAH
settings is maintained like this.
K4 01 Pro rata at period start date 0 0
K4 02 Pro rata upto mid-period at period start date 1 15
K4 02 Pro rata upto mid-period at period start date 2 14 1
K4 02 Pro rata upto mid-period at period start date 3 15 2
K4 02 Pro rata upto mid-period at period start date 4 15 3
K4 02 Pro rata upto mid-period at period start date 5 15 4
K4 02 Pro rata upto mid-period at period start date 6 15 5
K4 02 Pro rata upto mid-period at period start date 7 15 6
K4 02 Pro rata upto mid-period at period start date 8 15 7
K4 02 Pro rata upto mid-period at period start date 9 15 8
K4 02 Pro rata upto mid-period at period start date 10 15 9
K4 02 Pro rata upto mid-period at period start date 11 15 10
K4 02 Pro rata upto mid-period at period start date 12 15 11
in the table details shows like this.
Table: T090NP
Displayed Fields: 15 of 15 Fixed Columns: 3 List Width 0250
MANDT AFAPL METPER PERBZU PERBNA PERBAB PERBUM XBZDAT PERBAW PERBIF PERBAA PERBZR PERBD1 PERBD2 PERTXT
740 0AT 007 04 06 05 05 X 04/06/05/05
740 0BR 007 04 06 05 05 X 04/06/05/05
740 0PL 002 11 11 11 11 X 11/11/11/11
740 0PL 003 01 01 01 01 X 01/01/01/01
But any where I have to Assign this steps to Deprecation Key for Groups Assets?
thanks
Ravi -
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,
JBCI 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 asset tax depreciation balances
Dear Experts,
I have a critical issue to be resolved. Someone please guide me.
I want to change the opening balance, current year transactions
accumulated depreciation of year 2008 (Fiscal year variant V3 -
Apr to March) of group assets in tax depreciation area (15) using tcode
AS82. This is required because during data migration in 2006 the
tax dep values for group asset were not entered accurately. With
this the dep calculated was wrong resulting in wrong net bbok value
further wrong carry forward bal in 2007 Apr and so on. My client
now wants atleast correction of year 2008 values so that the future
calculations are right and done by SAP for tax report. What should I do
for this?
What impact would be there if I change Asset Transfer date because
when I go to AS82 to change the takeover values of a group asset in 2008
i get an error msg " Closed fiscal year doesnt agree with legacy data
transfer date" Transfer date is 31.07.2006. This is really critical
and I have been posting this from days but no response. Please help
me experts.Any help would be really appreciated.
Rgds
KomalNot answered. Somebody throw some light on this. Your inputs are valuable.
Regards
Komal
Edited by: Komal on Feb 2, 2009 7:14 AM
Edited by: Komal on Feb 2, 2009 7:14 AM -
Calculation of Depreciation for Group Asset
Hi Experts,
I am getting a problem while doing depreciation for group asset
Ex: 80,000; Rate 10%
total depreiaiton p.a is Rs 8000/-
as per the Indian standards if it is below 180 days it should take Rs 4000/-, but in my system it is showing Rs 3333.33
my depreciation start date & capitlization date is 01.11.2007.
Regards,
Satya Vani.Dear,
Reshma.
Looking at your Questions let us take explanation for Group Assets :-
1 ) We need to create new different asset class for Group Class in OAOA. Then permit the depreciation area for only Group Asset in OAYM as it is in your current scenario India is Depreciation Area 15 Just select your company code in OAYM and check the Grp Asset field for respective area 15. Then go to OAAX here we have to maintain the assets classes particularly for Group Assets. So check your Group Asset classes for Group Assets. Cerate different Group asset classes for your said requirement.
In these depreciation areas, it is then possible to make an assignment to a group asset. You make this assignment in the specifications for the depreciation area in the asset master record. When you post an acquisition to this kind of asset, the system duplicates the line items from this depreciation area on the given group asset.
2 ) According to me you have to create different depreciation keys for Group Asset classes. Assign the Depreciation keys to your newly created Group Asset Classes in OAYZ and make sure you are deactivating 01 area which is Book Depreciation area.
3 ) As far as I know this is the only functionality available to handle Group Assets. How ever SAP does not have any standard Group Assets functionality. SAP does not supply asset classes to be used solely for group assets. It is we have to determine as per varying Business Process.
I hope this will clear your doubt makes you to understand. Please revert back for further clarification. Welcome you.
Regards,
Pankaj A Bhalerao.
Edited by: pankaj_ab on Feb 3, 2010 8:26 AM -
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 blockedHi 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 -
System is not calcutiong tax depreciation in the asset master.
Hi SAP Team,
As per configuration, SAP system is not calculating depreciation in the
area 11 tax depreciation in the asset master,however it is not
calcuating tax depreciation at the group asset level.
In our system we linked group asset in the area 11 in the asset master.
Thanks
ChinnaCheck screen layout rules for that asset class, the field might have been suppressed.
SPRO --> Fin Acg --> Asset Acg --> Master data --> Screen Lyaout --> Define screen layout for asset master data -- select relevant screen layout rule assigned to asset class.
Click on logical field groups ---> General data --> Field group rules...... select radio button under optional
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