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Hi Flocks

Sap release new version 6 in Union Budget Changes – 2016 S Note – 2290356

Symptom

This Note delivers the changes related to the Union Budget for 2016, as announced through Note 2287721

Other Terms

Union Budget, Budget Changes 2016, HINCALC0, PC00_M40_CALC, PC00_M40_CALC_SIMU, Surcharge, Section 80EE,  Section 80GG, PF, EPF, Income Tax

Reason and Prerequisites

Union Budget Changes 2016

Prerequisites:

Minimum Support Pack requirement:

Software Component Release Support package
SAP_HRCIN 600 SAPK-600C5INSAPHRCIN
SAP_HRCIN 604 SAPK-60484INSAPHRCIN
SAP_HRCIN 608 SAPK-60818INSAPHRCIN
EA_HRCIN 604

SAPK-60473INEAHRCIN

EA_HRCIN 605 SAPK-60557INEAHRCIN
EA_HRCIN 606 SAPK-60641INEAHRCIN
EA_HRCIN 607 SAPK-60730INEAHRCIN
EA_HRCIN 608 SAPK-60810INEAHRCIN

Reason for Versioning:

Note Version Reason for Version
1 Pilot Release to customers
2 Release for All Customers
3 Modification in Note Text
4 Modification in Manual Instructions for CF and BF wagetypes.pdf
5 Modification in Note Text
6 Modification in Manual Instructions for Union Budget Changes.pdf

Solution

This Note covers changes that are effective from April 1, 2016 as per the Budget 2016 proposal.

Important:

The Finance bill has not received the President’s assent at the time that this note is being released. Therefore customers are requested to confirm the same with their legal counsels before applying these changes in their system.

The following changes have been made after the budget:

1. EPS for New Joinees

The government will pay 8.33% of the Employee Provident Fund (EPF) for all new employees for the first three years. The government will contribute the amount on behalf of the employers, for the first three years of employment. The scheme will be applicable to employees with a monthly salary of up to INR 15,000. A new field is added to IT0587 to mark the eligible employees who have relevant joining dates.

2. Tax Credit

The ceiling of tax rebate under Section 87A of the Income Tax Act has been proposed to be raised to INR 5,000 from INR 2,000 for individuals with income less than INR. 5 lakh.

3. Changes under Section 80EE (Deduction on Interest on Housing Loan)

An employee is entitled to claim both the interest and the principal components of home loan repayments for tax benefits. Currently interest payable on a ‘self-occupied’ house is subject to a maximum deduction of INR 2 lakh under the head ‘Income from House Property.’ For first-time home buyers, an additional deduction of INR 50,000 on interest for a loan upto INR 35 lakh is proposed, provided the house value does not exceed INR 50 lakh. This needs to be maintained in IT0585.

4. Changes under Section 80GG (HRA)

The contribution limit for Section 80GG has been increased from INR.24000 per annum to INR.60000 per annum. This needs to be maintained in IT0585.

5. Surcharge on income above INR 1 crore is increased

The surcharge on income tax levied on individuals earning an income of INR 1 crore or more has been increased from 12% to 15%.

6. Income from Dividends

Dividend in excess of INR 10 lakh per annum will be taxed at the rate of 10%. For example, if the dividend is INR 12 lakh, INR 2 lakh will be taxed at 10%.

7. Superannuation Fund

The exemption limit is proposed to be increased from INR 1 lakh to INR 1.5 lakh for the annual contribution by an employer to a superannuation fund. The perk calculation of superannuation is a consulting solution, and the constant ZSALT needs to be modified to INR 1.5 lakh.

8. Employer Contribution of Provident Fund

The employer’s contribution to Provident fund in excess of 12% of the employee’s salary or INR 1,50,000 per annum will be subject to tax.

NOTE: For the above mentioned Point No. 8, the change proposed is still under consideration by Govt. Hence, once the same is passed in parliament a note will be released separately.

The following three options are available for implementing the solution:

Option 1 :

Apply the relevant HRSPs to obtain the necessary Corrections.

Option 2 :

You do not want to do a HRSP upgrade and you are already at the minimum support package as mentioned in the table above.

Perform the following steps to implement the changes:

Step 1 : Maintain the customizing entries as mentioned in the attached document (Manual Instructions for Union Budget changes.pdf).

Step 2 : Maintain the customizing entries as mentioned in the attached document (Manual Instructions for CF and BF wagetypes.pdf) .

Step 3 : Upload the new format for Tax Simplifier Solution (TSS) as mentioned in Step 1 and upload the attached format ( SFPF_HR_IN_SSITP_2010.zip ) .

Step 4 : Apply the attached Correction Instructions through ‘SNOTE’ transaction.

Option 3 :

You are not at the minimum support package and would like to do a HRSP upgrade only for India payroll.

Step 1 : Apply the relevant HRSP that is a CLC for India payroll ( HRSP of April 2016 ) as per the SAP Note 2296861 .

Step 2 :  Maintain the customizing entries as mentioned in the attached document (Manual Instructions for CF and BF wagetypes.pdf).

Step 3 : Upload the new format for Tax Simplifier Solution (TSS) as mentioned in Step 1 and upload the attached format ( SFPF_HR_IN_SSITP_2010.zip ) .

Step 4 : Apply the attached Correction Instructions through ‘SNOTE’ transaction.

Header Data

Released On 19.04.2016 22:54:14
Release Status Released for Customer
Component PY-IN India
Priority Correction with high priority
Category Legal change

Validity

Software Component

From Rel.

To Rel.

And Subsequent

SAP_HRCIN

470

470

500

500

600

600

604

604

608

608

EA-HRCIN

600

600

602

602

603

603

604

604

605

605

606

606

607

607

608

608

Correction Instructions

Correction Instructions

Software Component

Valid from

Valid to

Number

SAP_HRCIN

600

600

35610

SAP_HRCIN

600

600

35609

SAP_HRCIN

604

604

32187

SAP_HRCIN

604

604

32182

SAP_HRCIN

604

604

32116

SAP_HRCIN

608

608

35606

SAP_HRCIN

608

608

35608

EA-HRCIN

600

600

35603

EA-HRCIN

602

602

35602

EA-HRCIN

603

603

35601

EA-HRCIN

604

604

35580

EA-HRCIN

605

605

32271

EA-HRCIN

606

606

32251

EA-HRCIN

607

607

32199

EA-HRCIN

608

608

32194

Support Packages & Patches

Support Packages

Software Component

Release

Support Package

SAP_HRCIN

600

SAPK-600D4INSAPHRCIN

604

SAPK-604A0INSAPHRCIN

608

SAPK-60828INSAPHRCIN

EA-HRCIN

600

SAPK-600D4INEAHRCIN

602

SAPK-602B3INEAHRCIN

603

SAPK-603A8INEAHRCIN

604

SAPK-604A0INEAHRCIN

605

SAPK-60577INEAHRCIN

606

SAPK-60662INEAHRCIN

607

SAPK-60751INEAHRCIN

608

SAPK-60828INEAHRCIN

Attachments

File Name

File Size (KB)

Mime Type

Manual Instructions for CF and BF wagetypes.pdf

533

application/pdf

SFPF_HR_IN_SSITP_2010.zip

139

application/x-zip-compressed

Manual Instructions for Union Budget changes.pdf

1533

application/pdf

Cheers

Ratan

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