2290356 - Union Budget Changes - 2016

8/18/2019 2290356 - Union Budget Changes - 2016

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SAP Note

Header Data

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:

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 confirmthe 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 willcontribute the amount on behalf of the employers, for the first three years of employment. The scheme will be applicable to employees with amonthly 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 withincome 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 payableon 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

2290356 - Union Budget Changes - 2016

Version 3 Validity: 13.04.2016 - active Language English

Released On 13.04.2016 04:30:24

Release Status Released for Customer

Component PY-IN India

Priority Correction with high priorityCategory Legal change

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







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 INR50 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 inIT0585.

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 at10%.

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 superannuationfund. 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.

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.

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



Correction Instructions

Support Packages & Patches

Attachments

608 608

Correction Instructions

Software Component Valid from Valid to Number

SAP_HRCIN 470 470 35643

SAP_HRCIN 500 500 35641

SAP_HRCIN 600 600 35610

SAP_HRCIN 600 600 35609

SAP_HRCIN 604 604 32116

SAP_HRCIN 604 604 32187

SAP_HRCIN 604 604 32182

SAP_HRCIN 608 608 35608

SAP_HRCIN 608 608 35606

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

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




File Name File Size (KB) Mime Type

Manual Instructions for Union Budget changes.pdf 1474 application/pdf

Manual Instructions for CF and BF wagetypes.pdf 504 application/pdf

SFPF_HR_IN_SSITP_2010.zip 139 application/x-zip-compressed

2290356 - Union Budget Changes - 2016

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Transcript of 2290356 - Union Budget Changes - 2016