Understanding Form 24Q in SAP HR: A Guide for Payroll Professionals

In India, employers are legally obligated to deduct income tax from their employees’ salaries. This process is known as Tax Deducted at Source (TDS). Form 24Q is a quarterly statement that every employer with a valid Tax Deduction Account Number (TAN) must submit to the Income Tax Department, detailing the TDS deducted and deposited.

Why is Form 24Q Important?

• Compliance: Form 24Q ensures that employers accurately report and deposit the TDS collected from their employees, helping to maintain compliance with Indian tax laws.
• Transparency: The quarterly statement provides transparency in the TDS process, allowing the Income Tax Department to track and reconcile tax deductions.
• Employee Records: Form 24Q is a crucial record of income tax deductions for employees, which they can utilize while filing their tax returns.

Form 24Q in SAP HR

SAP HR offers powerful tools that streamline the generation and submission of Form 24Q. Here’s a breakdown of the critical steps:

1. Prerequisites:
   • Challan Mapping Report (HINUCMAP): This ensures that tax deductions are accurately mapped to corresponding challans (proof of payment).
   • Complete Payroll Results: The payroll results for the relevant quarter, including all employees who were with the organization during that period, must be finalized.
2. Running the Form 24Q Report:
   • Access the Form 24Q report in your SAP HR system.
   • Specify the relevant quarter, financial year, company code, and other necessary selection criteria.
   • Execute the report.
3. Output:
   • The system generates the Form 24Q data in the required e-file format.
   • It also creates Form 27A, a cover sheet for the e-filing submission.
4. Submission:
   • Electronically submit the e-file to the Income Tax Department (through the NSDL portal).
   • Print a physical copy of Form 27A and submit it to the tax authorities.

Key Points to Note

• Deadlines: Each quarter’s Form 24Q submission has specific deadlines. Failure to comply can result in penalties.
• Alternate Financial Year: If your organization follows an alternate financial year, SAP HR can be configured to generate Form 24Q by standard financial year quarters.
• Updates: Stay informed about any changes or updates to the Form 24Q regulations or filing process.

Simplifying TDS Compliance

SAP HR’s Form 24Q functionality significantly simplifies TDS compliance for employers in India. Automating data consolidation and report generation helps streamline this crucial aspect of payroll administration.