Understanding SAP HR Infotype 585: A Key Tool for Tax Deductions

In SAP Human Resources (HR), information types are crucial in organizing and storing employee data. Infotype 585 is designed to manage tax deductions under Section 80 of the Income Tax Act (relevant for India-specific payroll). Let’s dive into the details of this essential info type.

Purpose of Infotype 585

Infotype 585 streamlines the recording of employee contributions towards various tax-saving investments and schemes as defined under Section 80 of the Income Tax Act. Some common examples include:

• Public Provident Fund (PPF)
• National Savings Certificate (NSC)
• Life Insurance Premiums
• Donations to eligible charities
• And more

By accurately maintaining Infotype 585 records, the SAP HR system ensures that these valid deductions are considered during payroll calculations, ultimately reducing an employee’s taxable income.

Key Data Fields in Infotype 585

• Subtype: Identifies the specific type of Section 80 deduction (e.g., 80C, 80CCC, 80CCD).
• Financial Year: The financial year to which the deduction applies.
• Proposed Amount: The estimated deduction amount the employee declares at the beginning of the financial year.
• Actual Amount: The actual amount contributed by the employee throughout the financial year.
• Consider Actual Contribution for Tax Exemption: This checkbox instructs the payroll system to use the actual amount for income tax calculations.

How Infotype 585 Impacts Payroll

During payroll processing, the SAP HR system references Infotype 585 to determine the tax deductions permissible for an employee. Based on the recorded deductions, the taxable income is reduced, leading to a lower tax liability.

Maintaining Infotype 585

• Employee Responsibility: Typically, employees provide their projected Section 80 deduction amounts at the beginning of a financial year. They are responsible for submitting proof of actual contributions towards the end of the year.
• HR Responsibility: HR personnel are tasked with updating and maintaining accurate records in Infotype 585 based on the information and documents provided by employees.

Important Considerations

• Infotype 585 can only hold one record per employee for a single financial year.
• The payroll control record determines the financial year that defaults in Infotype 585.
• Proper configuration in the backend tables (like V_T7INI8, V_T7INI9, etc.) is essential for Infotype 585’s correct functioning.

In Conclusion

Infotype 585 is a valuable tool within the SAP HR landscape, empowering employees and HR departments to effectively manage tax deductions under Section 80 of the Income Tax Act. By meticulously maintaining this info type, organizations can ensure payroll accuracy and tax compliance.