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Medical Allowance not getting Tax Exempted

Former Member
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Dear All,

We are paying Medical Allowance as 1250/- per month to the employees which we want to make it as Tax exempted.

Can anybody pls suggest on this.

We have done the following steps for this.

In Table Taxability of wage types: V_T7INT9 as

1182       Tax exemption is Limit Based         Limit for Tax Exemption is Monthly       15.000,00       SMED    INR        01.01.1999     31.12.9999

We are paying this from Infotype 0008.

Pls suggest...

Kind Regards

Nag

Accepted Solutions (1)

Accepted Solutions (1)

sikindar_a
Active Contributor
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Medical Exemptions will not be part of Sec 10 they will be part of Sec 17 (2)  Can u check in RT /414 WT is generateing ,

i think u are talking about Medical Reimbursement right

Former Member
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Hi,

can u please check in this table V_T7INA9? have u assigned 1182 wagetype for specific allowance grouping?  for example , the mass of employees fall into "L3HN" allowance grouping, then u must insert 1182 WT in this allowance grouping in the table V_T7INA9.

SPRO > Payroll : india > Reimbursements, Allowances and Perks >Calculate Eligibility for RAPs ,

enter country grouping  and allowance grouping for which u want to add this wagetype.

Thanks,

Nirali P

Former Member
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Hi Sikindar,

This is not Medical Reimbursement. For that we have done separtate in IT15, IT582. This is only Medical Allowance and wants to be tax exempted.

Kind regards

Nag

Former Member
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Hi Nirali,

This is not done. I need to do this. Before this i think i need to create Pay scale grouping for allowances  V_T7INA1 as i am not able to find my allowance grouping.

Pls suggest

Kind Regards

Nagesh

Former Member
0 Kudos

Hi,

Check this tables  :

1. Maintain table V_T7INT9 with SMED

2. maintain table V_T7INA9 with RAP indicator for all allowance grouping

3. Define Pay Scale Grouping for Allowance  : V_T7INA1

4. Maintain Pay Scale of Grouping & Levels  - V_T510 , add this 1182 WT in it

5.Assign Pay Scale of Grouping for Allowance – V_T7INA3

6.Assign Wagetype Model for Pay scale group for allowance -V_T7INA5

it will resolve

Thanks

Nirali P.

raghu_c
Active Contributor
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There is no provision for Medical allowance being Tax exempt under existing IT rules. The limit that you have mentioned is for Medical Reimbursement only. The only reason why companies call it allowance is that if the employee doesnot submit the bills, this amount will be totally taxed, and if he provides the bills will be tax exempt to a limit of 15,000. This details you wil need to maintain in IT-582.

Hope this clears your confusion

Raghu

Former Member
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Dear Nirali,

Thanks, I have done these and moving for testing.

Kind Regards

Nag

Former Member
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Dear Raghu,

You r absolutely right. But in my previous company, Employee got the Medical Allowance in each month as 1250.There is no provision that Employee's submit the bill for that.To map this scenario

Is it that same way we configure it as Med. Reimbursement?

Plz put some light on this.....

Thanks,

Santosh

raghu_c
Active Contributor
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Yes Santosh you will have to do that way only. You will have to also maintain 582 in order to get exemptions.

Raghu

Sujith_EM
Active Contributor
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Tax is exempted for medical reimbursement , some where it is not say as medical reimbursement it is considered as medical allowance.

What ever may the name,  if you want tax exemption under section 17(2) either you have to maintain the amount in IT0582 against SMED

Or ( in case you dont want to maintain it in IT0582)

please go to schema  INN1 and We have to maintain “X” in 3rd column for INMED ( please see the below given screen shot )

From your previous posts I believe you have maintained V_T7INT9

Former Member
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Ok.Thanks

Santosh

Former Member
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Hi,

Is ur issue resolved? If yes then close this thread.

Nirali P

Former Member
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Dear Nirali,

Thank you very much for the information. My issue is solved now. But i have a new problem. For only one employee this tax exemption is not happening now, for rest of the employees it is working fine.

The only diff is the employees DOJ.

Pls suggest...

Kind Regards

Nag

Former Member
0 Kudos

Hi,

Check with PS grouping and ESG for that employee with WT model also. check the log for that emp, is it displaying INMED amount?

Thanks,

Nirali P.

Former Member
0 Kudos

Hi Nirali,

In the payroll log under INMED - Input - IT - EXM is showing as

21.07.2011  21.07.2011  MDA      15,000.00  INR              INR

But /3M1 & /414 are not getting generated for this employee.

Pls suggest..

Kind Regards

Nag

Answers (0)