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PAY_IN_HSG_200 - Maintain FRV and Basis for Non-Metro Cities

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In this activity, check and if necessary maintain the constants for Fair rental value (FRV) and Basis for non-metro cities. These amounts are used to calculate the perquisite value of housing in case the employee uses company provided accommodation.

The calculation for FRV and basis amounts are calculated for three circumstances, similar to the process used for metro-cities.

The calculation for the first part identical to the method used for the metros where the actual FRV is considered if it is less than 10 percent of the Basis amount.

In the second part, if the FRV is more than or equal to10 percent of the Basis amount upto 50 percent of the employees basis, then 10 percent of the employees basis is considered as the perquisite value of the housing provided.

In case the FRV amount exceeds 50 percent of basis, then the taxable perquisite amount is FRV amount less 40 percent of the basis.

Mr. Kumar lives in Bangalore (a non-metro city) and receives a basis amount of Rs. 120,000 per year.

Scenario one

He resides in a company provided accommodation whose fair rental value is Rs. 24,000 per year.

Mr. Kumars FRV is compared with his Basis amount. Since Rs. 24,000 falls between 10 percent and 50 percent of Rs. 120,000, Rs. 12,000 (10 percent of Rs. 120,000) is taken as the perquisite value for taxation.

Scenario Two

Mr. Kumar lives in a company provided accommodation in Bangalore whose fair rental value is Rs. 11,000 per year. His FRV is compared with his Basis amount. Since Rs. 11,000 is less than 10 percent of Rs. 120,000, the actual FRV (Rs. 11,000) is taken as the perquisite value for taxation.

Scenario Three

Mr. Kumar lives in a company provided accommodation in Bangalore whose fair rental value is Rs. 65,000 per year. As this amount is greater than 50 percent of his basis, the perquisite value is calculated is the actual FRV less 40 percent of basis, which is 17,000 (from, 65,000 less 48000).

To change the Basis or FRV amounts, SAP recommends that you delimit the validity dates of the existing record and create a new record.

Modify the constants to meet your requirements by entering the appropriate validity dates and basis percentage or fair rental value amount as stipulated by the Government of India.

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