Overview of Balance Initialization for India

For the Professional Tax balances, you need to set the Area1 context.

To set the Area1 context for the dimensions Core Relationship Area1 Tax Year to Date and Core Relationship Area1 Half Year to Date, pass the state code context under AreaOne.
Derive the corresponding AreaOne value (lookup_code) for a particular state from the lookup ORA_HRX_IN_PT_STATES. For more details on the area code for professional tax, see Balances to Initialize for India.

For social insurance balances, you need to set the Organization context, hr_all_organization_units_vl.organization_id.

Set the Organization context for the dimension Relationship Organization Tax Year to Date, by passing the ContextOneName as Organization ID and the corresponding Organization_ID from hr_all_organization_units_vl as the ContextOneValue value, for the below social insurance balances:

Employer LWF Contribution
Employee LWF Contribution
Employer NPS Contribution
Employee NPS Tier 1 Contribution
Employee NPS Tier 2 Contribution
NPS Computation Salary
Employee PF Contribution
Employee Voluntary PF Contribution
Employee PF Contribution Arrears
Employee Voluntary PF Contribution Arrears
Employer PF Contribution

For earnings, tax related and Taxable House Rent Allowance balances, the Tax Unit context needs to be set. Set the TaxUnitName context to initialize the dimension Relationship Tax Unit Tax Year to Date for the following balances:

Earnings
Income Tax This Pay
Surcharge This Pay
Health and Education Cess This Pay
Taxable House Rent Allowance

For initializing the Professional Tax (PT) balances, here are the points to note:

Deduction Frequency in State	Salary Projection	Considerations
Monthly	Monthly	The Period to Date(PTD) value of PT computational salary for that state, is used to decide the PT slabs and deduction amount. For example: Nagaland The professional tax amount already deducted is considered for Deductions u/s 16.
Monthly	Annual	The Tax Year to Date(TYTD) value of PT computational salary for that state is used to decide the PT slabs and deduction amount. For example: Odisha The professional tax amount already deducted will be considered for Deductions u/s 16 and PT computational salary value for that state, is used to project the annual salary for PT calculation.
Annual	Annual	The TYTD value of PT computational salary for that state is used to decide the PT slabs and deduction amount. The professional tax amount already deducted is considered for Deductions u/s 16 and PT computational salary value for that state, is used to project the annual salary for PT calculation. For example: For Bihar, PT is deducted in the September payroll run. If payroll is being run from October onward, then initialize professional tax (amount which has been already deducted) for Deductions u/s 16 and PT computational salary value for Bihar to project the annual salary for PT calculation. This is because PT will not be deducted after September for Bihar. If payroll is set to be run in September or prior, then we can initialize the PT computational salary for that state along with professional tax as 0. In case of change is PT slabs in current system, exemption in Deductions u/s 16 will be provided as per the slab in current payroll. Any other PT that needs to be deducted is adjusted manually.
Half Yearly	Half Yearly	The THYTD value of PT computational salary for a state is used to decide the PT slabs and deduction amount. Ideally, we expect the deduction month at TRU to be kept same in both legacy and in Fusion. For example, if the deduction month is set to June for the first half year, and PT has already been deducted in the legacy system and the PT amount initialized as of 01-June, then when the payroll runs for June, the PT amount will be deducted in current system. This needs to be adjusted manually.
Monthly	Half Yearly	The THYTD value of PT computational salary for a state is used to calculate the PT slabs and deduction amount. If the first payroll run in Fusion is in June, PT will be deducted as per the slab the employee falls in the month of June. Any change needs to be done manually. Initialize the below dimensions in case of Half-Yearly projections: Professional Tax Core Relationship Area1 Half Year to Date PT Computational Salary for <State> Relationship Tax Half Year to Date

For the ESI balances, the ESI Eligible Salary is used to decide the eligibility of the employee. Based on the month from which ESI eligibility needs to be checked, the corresponding month balance can be initialized. For example, if the first payroll run is in August, and the employee eligibility needs to be decide based on April salary, then initialize the value for the dimension: Relationship Last April 1 Month.

Since ESI is deducted every month, we don’t account for what was already deducted in legacy system. We expect it to be deducted correctly and reported. We're only initializing the eligibility salary.

For calculating the Gratuity balances, both the government sector employees and private sector, who are covered by the Gratuity Act are considered. As the last month’s salary is used for gratuity calculation, the dimension Relationship Last Month can be initialized for the balance Gratuity Computation Salary.

For private sector employees not covered by the Gratuity Act, the last 10 months salary is used for gratuity calculation. Hence the balance value Gratuity Computation Salary for the last 10 months can be initialized. For example: Relationship Last July 1 Month, Relationship Last June 1 Month and so on.

For the leave encashment balance Leave Encashment Computation Salary, if the employee's termination date falls on the last day of the month, then initialize the dimension for the previous 9 months, and calculate the value using the current month’s salary and previous 9 months’ salary.

If the employee's termination date doesn't fall on the last day of the month, then initialize the dimension for the previous 10 months, and calculate the value using the previous 10 months’ salary.

For the retrenchment compensation balance Retrenchment Compensation Computation Salary, if the employees' termination date falls on the last day of the month, then preceding two months dimension needs to be initialized. If the employees termination date doesn't fall on the last day of the month, then preceding three months dimension needs to be initialized.

For calculating the Commuted Pension balance, if gratuity amount needs to be considered then initialize the Gratuity Amount balance. Similarly, the correct month’s dimension needs to be initialized, if you run payroll in the second half of the financial year.

Note: If you initialized any of the below balances with a value, then you need to initialize the Earnings balance with the same amount. The salary in section 17 reflects the termination payment amount.

Gratuity Amount
Leave Encashment
Retrenchment Compensation Amount
Commuted Pension
VRS Amount

For HRA, the below balances need to be initialized, with each month’s correct value:

Salary for House Rent Allowance Exemption
Taxable House Rent Allowance
House Rent Allowance Balance
For Taxable House Rent Allowance ensure that the value in Relationship Tax Unit Tax Year to Date matches the sum of the individual months value.

Example. If Relationship Tax Unit Tax Year to Date is 2400, then

Relationship Last April 1 Month -- 600

Relationship Last May 1 Month -- 600

Relationship Last June 1 Month -- 600

Relationship Last July 1 Month -- 600 is a valid combination.