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Sec 80CCD -additional deduction for National Pension contribution- budget 2015

former_member216910
Participant
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Hi Experts, As per 2015 budget, SAP has released Note  2168787 which contains many changes including the following. new section Sec. 80CCD- Additional deduction for National Pension System contribution. As per the Note I have maintained manual changes after updating the patch level to the required. Contribution for National pension increased from 1.5 lac to 2 lac. I have maintained the amount in 585 Infotype for National pension contribution.But the amount is not exempted for  National pension scheme when I  run payroll. It is not displaying under Chapter VI deductions in payslip. Recently we updated the patch level upto 90.Experts plz help Regards, P.Lakshman

Accepted Solutions (1)

Accepted Solutions (1)

jayantvenkata
Product and Topic Expert
Product and Topic Expert
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Hello P.Lakshman

As per SAP note  2168787, to get the deduction for section 80ccd(1b), following need to be taken care of :-

•For providing the deduction under 80CCD(1), 10% of annual NPS Basis acts as one of the factors
•You need to ensure that Cumulation class ‘43’ & ‘44’ are checked / ticked for all relevant wage types which forms the monthly basis for NPS
•Ensure that there is forced retro for employees from Month of April  to have correct value of annual NPS basis
•There will not be any extra/separate line item in Infotype 0585 for 80CCD(1B) contribution. You can continue to maintain the contribution towards NPS in IT 0585 under line item “Contribution to pension scheme of Central Government”
•Payroll will generate the following exemption Wage types:

         /3I7 : 80CCD(1)

        /3I9 : 80CCD(1B)

        /3I5 : Combined Employee 80CCD Exemption ( /3I7 + /3I9 )

Please check the following of the above wage types are getting formed in your payroll RT.

Thanks and Kind Regards

Ramana

former_member216910
Participant
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Dear Jayanti, Thanks for your response. I will do the necessary changes and get back to you. Regards P.Lakshmanaperumal

Answers (2)

Answers (2)

Former Member
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Dear experts,

Can you please let me know what are all the wage types we need check the processing classes 43 & 44.

Apart from the 2168787 is there any other setting i have to follow.

Please help me on the same i am new to indian payroll

jayantvenkata
Product and Topic Expert
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Hello

•Check Cumulation Class '43' & '44' for all relevant wage types which are to be considered for employee's new pension scheme basis formation for employee and employer contribution respectively.

These wage types constitutes all salary components that are defined as salary for the purpose of the IT Act which includes basic salary, dearness allowance and any other special allowances.

Thanks and Kind Regards

Ramana

Message was edited by: Jayanti Venkata Ramana

Former Member
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Hi Jayanthi,

Thanks for your inputs.

After all the configuration done how can we test the scenario.

where can we update investment means is there any infotype.

Thanks

sunny

former_member194940
Active Participant
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HI, Use infotype 0585 Contribution to pension scheme of Central Government - update 50,000. In 0586 - Life insurance -1,20,000. Total exemption should be 1,70,000. Check and confirm. Regards, Bhabagrahi

Former Member
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Our systm current versions are as follows

SAP_HRCIN 600 0105 SAPK-600A5INSAPHRCIN Sub component SAP_HRCIN of SAP_HR

EA-HRCIN 600 0105 SAPK-600A5INEAHRCIN Sub component EA-HRCIN of EA-HR

With the above versions only we have implemented the note.

Followed the all configuration which has maintained in note release.

In info type 585 the line item has been changed to the 200000 as follows

I have made the cumulation class check for the  43&44 for basic pay allowance.

Before NPS amount entry in 587 infotype the chapter VI exemption as follows

Log is

I have made the investment in 587 info type as follows from 1st April, 2015

I have run the payroll, the log is as follows

but in log it was giving the value as 42336

Chapter VI exemption also not ge changed.

For other employee who are having agg of chapter VI is below 150000, when we are giving the valuel in 587 info type the exemption is giving only upto 151500.

Kindly let me know any other steps i have to follow.

Former Member
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Dear Experts,

I want to deduct NPS contribution from employee salary and please let me know do i need to add any line item in pe51 form to display the changes.

kindly help me in is there related changes to be done for form16 as well as to payslip.

Regards

Sunny

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Hi Sunny,

you can deduct NPS contribution in infotype 587 through salary. As per the sap note & manual instructions, the relevant changes were taken care in Form-16. But for pay-slip, you may have to check it.

Please check SCN threads/ SAP knowledge base from support.sap.com related to this.

regards,

Bala.

former_member216910
Participant
0 Kudos

Hi Experts, As per 2015 budget, SAP has released Note  2168787 which contains many changes including the following. new section Sec. 80CCD- Additional deduction for National Pension System contribution. As per the Note I have maintained manual changes after updating the patch level to the required. Contribution for National pension increased from 1.5 lac to 2 lac. I have maintained the amount in 585 Infotype for National pension contribution.But the amount is not exempted for  National pension scheme when I  run payroll. It is not displaying under Chapter VI deductions in payslip. Recently we updated the patch level upto 90.Experts plz help Regards P.Lakshman