Introduction
In every business, it’s important to manage employee taxes correctly. Empress provides an easy way for your employees to submit their tax exemption proofs. This feature is called Employee Tax Exemption Proof Submission. This guide will guide you through the process of using this feature effectively.
Understanding the Employee Tax Exemption Proof Submission Feature
The Employee Tax Exemption Proof Submission feature allows employees to provide evidence for their claimed tax exemptions. They can submit receipts, documents, or other forms of proof. The feature gives employees flexibility to submit proofs at any point during the payroll period.
Employees usually perform this process towards the end of a Payroll Period. However, unlike the Employee Tax Exemption Declaration, there is no limit on the number of proofs an employee can submit.
Please note: Before creating an Employee Tax Exemption Proof Submission, an Employee Tax Exemption Declaration must have already been created.
Accessing the Employee Tax Exemption Proof Submission Form
To begin, follow this path to access the form: Home > Human resources > Employee Tax Exemption Proof Submission.
How to Create an Employee Tax Exemption Proof Submission
If you’ve already submitted an Employee Tax Exemption Declaration, click on ‘Submit Proof’ in the Declaration form. Empress will automatically fill in relevant details in the Proof Submission form.
However, if you wish to create a new submission manually, follow these steps:
- Go to the Employee Tax Exemption Proof Submission list.
- Click on ‘New’.
- Fill in all the necessary details.
- Specify the ‘Type of Proof’ (documents, receipts, etc.)
- Attach the proofs by clicking on the Attach button at the bottom of the form.
- Enter the House Rent Payment Amount, and specify the Rented From Date and Rented To Date.
- Save and Submit the form.
Once submitted, the Total Exemption Amount will be deducted from the employee’s annual taxable earnings when calculating the tax deductions in the final payroll.
Important Notes on Tax Exemption Proof Submission
Empress considers proofs in the last payroll of the Payroll Period for adjusting the final taxes based on the submitted proof. If you need to adjust any additional tax collected or consider proof submission of employees at any time before the last payroll, check the Deduct Tax For Unsubmitted Tax Exemption Proof option while processing Payroll Entry or in the Salary Slip of the employee.
Special Considerations for India
If your business operates in India, there are a few additional points to note. In the current fiscal year, House Rent Allowance (HRA) exemption from taxable earnings is the minimum of:
- The actual amount allotted by the employer as the HRA.
- The actual rent paid less 10% of the basic salary.
- 50% of the basic salary, if the employee resides in a metro city (40% for a non-metro city).
Employees should also submit proof for HRA Exemption as part of the Employee Tax Exemption Proof Submission. Empress will calculate the exemption eligible for HRA and exempt it while calculating the taxable earnings in the last payroll of the Payroll Period.
Remember, the HRA component should be configured in the Company settings for the HRA exemption to work effectively.
Conclusion
The Employee Tax Exemption Proof Submission feature is a powerful tool in Empress, allowing employees to easily submit and track their tax exemption proofs. By using this feature, your business ensures a smooth and accurate process for managing and calculating employee taxes. For further assistance or guidance, please refer to our additional non-technical resources or reach out to our support team.