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Author's profile photo Former Member

Leave Encashment & tax deduction as per slab through off cycle pay roll

Scenario: For paying Leave encashment through off cycle &

Deducting tax on flat rate based on employee’s annual income range.

Solution:

1.Copy wage type MLE0 to some custom name space

2.Do the necessary configuration for IT 0416

3.Do the necessary configuration for Off cycle

4.Maintain the custom wage type in V_T7INA7 as Allowance/Reimbursement, also maintain V_T7INT9 table with tax code STDR for the custom wage type.

5.Write a custom PCR for holding the base amount for calculation of EL encashment & insert it in the main schema, before IT table get refreshed.

6.Write another PCR to calculate the EL Encashment Amount & insert it it XT00 Subschema,

7.Modify the Subschema INN1

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Note:

Basic Pay =17120

DA=17565

(BASIC+DA)/30*10=34685/30=1156.16*10=11561.66=11562*20%=2312.4

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Modification In INN1 Schema

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Maintain IT 0416 for the employee

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Cross check his annual gross Income

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Check the applicable slab code for his annual income range

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Check the table for annual income range & respective tax liability maintained for the same.

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Run the pay roll in off cycle mode,& Verify the out put

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Validate the output

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Thanks & Regards,

Prashanti Swain

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      3 Comments
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      Author's profile photo BALASUBRAMANIAN AP
      BALASUBRAMANIAN AP

      Hi,

      It is a crisp document, which shows the fastest way of doing leave encashment in off-cycle payroll and tax deduction.

      Good document.

      regards,

      Bala.

      Author's profile photo Former Member
      Former Member
      Blog Post Author

      Thanks Bala

      Author's profile photo Het Bhatt
      Het Bhatt

      Hi Prashanti,

      I am encountering same scenario in which, I have done same configuration as suggested by you. But it is not generating tax in Off-Cycle, It is generating tax in Regular Cycle.

       

      Kindly suggest your opinion on this.

      Regards,

      Het Bhatt