Previous year arrear

Question

Hi Experts,
CLIENT IS USING LEGACY SYSTEM CURRENTLY.
Currently the client is having FY from Feb - Mar. Now they are planning to streamline there process with standard and make FY from Apr - Mar.
Now for FY 2007 employee has paid ITax upto Feb. In FY 2008 we are planning to include Mar 2007 salary. so now Form 16 will reflect 13 months salary (since he has not paid tax for Mar 2007).
I want to upload the employee's Mar 2007 salary in system against the wagetype like previous year arrear and standard wagetype used for this purpose will be "Taxed but not paid" wagetype.
(since employee has been paid Mar salary but no tax has been deducted)
For achieving this I need to know the Taxable income and Exemptions for each employee for Mar 2007.
I will upload the March payroll data for each employee and then find Taxable income and Exemptions, and thereafter calculate the net taxable income and then I'll suppy this amount to that employee in IT0015 against the wagetype "Taxed but not paid" in period Apr 2008.
Please suggest whether I am proceeding in a right manner or if there can be a better way to achieve this or if this process may result in some problems.
Regards,
Tomesh
Edited by: Tomesh Sahu on Jun 23, 2008 3:47 PM

Answer 1

Hi Sur,
/616  Add gross salary,It is related with section 89 relief ( claim of income tax difference)
This wage type stores the differences between the gross actually paid and the gross salary including the arrears payment.
The reason for creation of /616 is some employees  receives money/income  that of a previous period(arrears) or that of a future period in the current period , hence there is a change in Ptax and the employee can claim for the difference in PTax (section 89 Relief)
Check table T511K and look at what value you maintained for S89SW
Set the Value field to 1, if you want the system to compute Section  89(1) Relief for your employees.
Set the Value field to 0 or leave the field blank, if you do not  want the system to compute Section 89(1) Relief for your employees.
If you don't want to calculate it automatically please maintain  subtype 0004 in IT0588
>Please Check  PCR IN89, and table S89 in payroll log ( from this table you can understand the process that creates /616 )