SAP Note

3300975 - Union Budget 2023-2024 Changes in Tax Slabs, Standard Deduction,

Surcharge, Tax Rebate and LEA Exemption
Component: PY-IN (India), Version: 3, Released On: 10.04.2023

Symptom
As described in SAP ONE Support Launchpad - Notification of Legal
Changes https://launchpad.support.sap.com/#/legalchangenotification/NoteInforSet/jira=GSREQAPJ-
3953/MidColumnFullScreen/0, this SAP Note delivers the following changes for Budget 2023 - 2024
Basic exemption limit is raised to INR 300,000 from INR 250,000
Changes in the tax slabs, and reducing the number of slabs to 5
Standard deduction of INR 50,000
Surcharge on annual income above INR 50,000,000 reduced from 37% to 25%
Tax rebate limit is raised to INR 700,000 from INR 500,000
Leave encashment exemption limit raised to INR 2,500,000 from INR 300,000

Other Terms
Union Budget 2023-2024, NS01, Surcharge Rates, STDNR, Standard Deduction, Tax Rebate, NR01, Leave Encashment
Exemption Limit, SLEA, M, PIN_SLTYP, V_T7INT1, V_T7INT3, V_T7INT9, V_T511P, V_T511K,CSTXR

Reason and Prerequisites

Legal change
This SAP Note is relevant only for Payroll India.

Solution
Version Reason

1 Release for all customers

2 SAP Note text update

3 SAP Note text change - 25% to 30% for Concessional tax rate for slab 'Above 15,00,000'

This SAP Note covers changes that are effective from April 1, 2023 as per the Union Budget 2023-2024 proposal.
Important:
Refer to the SAP Note 3298673 - FAQ on Budget 2023-2024 for overall budget 2023-2024 solution & prerequisite details.
Customers are requested to consult their legal counsel before applying these changes in their system.
The following changes have been made after the budget proposal:
A) Revised tax rates for the new tax regime (Concessional tax rates u/s 115BAC):
Basic tax exemption limit for the new tax regime has been revised to INR 300,000 from INR 250,000. Below tax rates will be
applicable from the financial year 2023 - 2024

Slab Range Rates

Up to 3,00,000 Nil

From 3,00,001 to 6,00,000 5%

 From 6,00,001 to 9,00,000 10%

From 9,00,001 to 12,00,000 15%

From 12,00,001 to 15,00,000 20%

Above 15,00,000 30%

Note: Tax rates for employees under the old tax regime will remain the same.
B) Standard deduction:
As proposed in Union Budget 2023-2024, the standard deduction of amount INR 50,000 is applicable to employees under
the new tax regime effective from April 1, 2023. A new constant 'STDNR' has been created in the system which stores the
amount of standard deduction for the new tax regime.
C) Surcharge rate for the new tax regime:
The surcharge rate for employees under the new tax regime, having total taxable income above INR 50,000,000, is revised
from 37% to 25%.
1. New slab type Q '(Surcharge Rates for New Tax Regime)' has been introduced
2. Slab code 'NS01' has been introduced to maintain the surcharge rates for employees under the new tax regime. The
following surcharge rates will be applicable:

Income Range Rates

Up to 50,00,000 INR Nil

From 50,00,001 to 1,00,00,000 INR 10%

From 1,00,00,001 to 2,00,00,000 INR 15%

Above 2,00,00,000 INR 25%

Note: Surcharge rates for employees under the old tax regime will the remain same.
D) Tax Rebate for the new tax regime:
A tax rebate of INR 25,000 will be given under the new tax regime.
E) Leave encashment exemption limit:
Leave encashment exemption limit is enhanced to INR 2,500,000. For this wage type Leave Encashment(MLE0) or custom
specific wage type can be delimited in the view 'View Taxability of wage types (V_T7INT9)'.
The following options are available for implementing the solution:
Option 1:
Apply the relevant HRSPs to obtain the necessary corrections.
Option 2:
If you do not want to perform an HRSP upgrade and are already at the relevant minimum support package indicated in the
SAP Note 3298673 - FAQ on Budget 2023-2024, perform the following steps to implement the changes:
Step 1: Maintain the customizing entries as explained in the attached document Manual Instructions for Union Budget 2023-
2024.pdf
Step 2: Apply the attached correction instructions using the SNOTE transaction.

Software Components
Software Component From To And subsequent

S4HCMCIN 100 100

SAP_HRCIN 600 600

SAP_HRCIN 604 604

SAP_HRCIN 608 608

 Correction Instructions
Software Component Number of Correction Instructions

SAP_HRCIN 3

S4HCMCIN 1

Prerequisites
Software From To SAP Title Component
Component Note/KBA

S4HCMCIN 100 100 3248546 Incorrect Recomputation of Monthly Taxable Income (/4MI) PY-IN
Wagetype

SAP_HRCIN 600 600 3152508 One time annual perquisite amount inclusion in monthly amount PY-IN
paid (/4MI).

SAP_HRCIN 600 600 3156331 Union Budget 2022-2023 : Tax on income from virtual digital PY-IN
asset under section 115BBH

SAP_HRCIN 600 600 3248546 Incorrect Recomputation of Monthly Taxable Income (/4MI) PY-IN
Wagetype

SAP_HRCIN 604 604 3156331 Union Budget 2022-2023 : Tax on income from virtual digital PY-IN
asset under section 115BBH

SAP_HRCIN 604 604 3248546 Incorrect Recomputation of Monthly Taxable Income (/4MI) PY-IN
Wagetype

SAP_HRCIN 608 608 3156331 Union Budget 2022-2023 : Tax on income from virtual digital PY-IN
asset under section 115BBH

SAP_HRCIN 608 608 3248546 Incorrect Recomputation of Monthly Taxable Income (/4MI) PY-IN
Wagetype

Support Package
Software Component Version Support Package

S4HCMCIN 100 SAPK-10007INS4HCMCIN

SAP_HRCIN 600 SAPK-600M4INSAPHRCIN

SAP_HRCIN 604 SAPK-604J0INSAPHRCIN

SAP_HRCIN 608 SAPK-608B8INSAPHRCIN

This document is causing side effects

SAP Note/KBA Title

3319342 3319342 - Union Budget 2023 -24: Standard Deduction Applicable to Employees under New Tax Regime

3320581 Union Budget 2023-24: Delimit validity of slab codes applicable for new tax regime

Attachments
File Name File Size Mime Type

Manual Instructions for Union Budget 2023-2024.pdf 1619 application/pdf